- IS THE FLYING PUBLIC PROTECTED? AN ASSESSMENT OF SECURITY AT FOREIGN REPAIR STATIONS

[House Hearing, 111 Congress]
[From the U.S. Government Printing Office]

IS THE FLYING PUBLIC PROTECTED?
AN ASSESSMENT OF SECURITY AT FOREIGN REPAIR STATIONS

=======================================================================

HEARING

before the

SUBCOMMITTEE ON TRANSPORTATION SECURITY
AND INFRASTRUCTURE PROTECTION

of the

COMMITTEE ON HOMELAND SECURITY
HOUSE OF REPRESENTATIVES

ONE HUNDRED ELEVENTH CONGRESS

FIRST SESSION

__________

NOVEMBER 18, 2009

__________

Serial No. 111-44

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Printed for the use of the Committee on Homeland Security

[GRAPHIC] [TIFF OMITTED] TONGRESS.#13

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2011
__________

COMMITTEE ON HOMELAND SECURITY

Bennie G. Thompson, Mississippi, Chairman
Loretta Sanchez, California Peter T. King, New York
Jane Harman, California Lamar Smith, Texas
Peter A. DeFazio, Oregon Mark E. Souder, Indiana
Eleanor Holmes Norton, District of Daniel E. Lungren, California
Columbia Mike Rogers, Alabama
Zoe Lofgren, California Michael T. McCaul, Texas
Sheila Jackson Lee, Texas Charles W. Dent, Pennsylvania
Henry Cuellar, Texas Gus M. Bilirakis, Florida
Christopher P. Carney, Pennsylvania Paul C. Broun, Georgia
Yvette D. Clarke, New York Candice S. Miller, Michigan
Laura Richardson, California Pete Olson, Texas
Ann Kirkpatrick, Arizona Anh ``Joseph'' Cao, Louisiana
Ben Ray Lujan, New Mexico Steve Austria, Ohio
Bill Pascrell, Jr., New Jersey
Emanuel Cleaver, Missouri
Al Green, Texas
James A. Himes, Connecticut
Mary Jo Kilroy, Ohio
Eric J.J. Massa, New York
Dina Titus, Nevada
Vacancy
I. Lanier Avant, Staff Director
Rosaline Cohen, Chief Counsel
Michael Twinchek, Chief Clerk
Robert O'Connor, Minority Staff Director
------

SUBCOMMITTEE ON TRANSPORTATION SECURITY AND INFRASTRUCTURE PROTECTION

Sheila Jackson Lee, Texas, Chairwoman
Peter A. DeFazio, Oregon Charles W. Dent, Pennsylvania
Eleanor Holmes Norton, District of Daniel E. Lungren, California
Columbia Pete Olson, Texas
Ann Kirkpatrick, Arizona Candice S. Miller, Michigan
Ben Ray Lujan, New Mexico Steve Austria, Ohio
Emanuel Cleaver, Missouri Peter T. King, New York (Ex
James A. Himes, Connecticut Officio)
Eric J.J. Massa, New York
Dina Titus, Nevada
Bennie G. Thompson, Mississippi (Ex
Officio)
Michael Beland, Staff Director
Natalie Nixon, Deputy Chief Clerk
Joseph Vealencis, Minority Subcommittee Lead

C O N T E N T S

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Page

Statements

The Honorable Sheila Jackson Lee, a Representative in Congress
From the State of Texas, and Chairwoman, Subcommittee on
Transportation Security and Infrastructure Protection.......... 1
The Honorable Pete Olson, a Representative in Congress From the
State of Texas................................................. 3

Witnesses

Mr. Calvin L. Scovel, III, Inspector General, Department of
Transportation:
Oral Statement................................................. 5
Prepared Statement............................................. 7
Mr. Doug Dalbey, Deputy Director of Flight Standards for Field
Operations, Federal Aviation Administration, Department of
Transportation:
Oral Statement................................................. 16
Prepared Statement............................................. 17
Ms. Cindy Farkus, Assistant Administrator, Global Strategies,
Transportation Security Administration, Department of Homeland
Security:
Oral Statement................................................. 19
Prepared Statement............................................. 20
Mr. Robert Roach, Jr., General Vice President of Transportation,
International Association of Machinists & Aerospace Workers:
Oral Statement................................................. 35
Prepared Statement............................................. 36
Mr. Robert Gless, Assistant Director of the Transport Workers
Union of America, Air Transport Division:
Oral Statement................................................. 38
Prepared Statement............................................. 40
Mr. Chris Moore, Chairman, Teamsters Aircraft Mechanics
Coalition, International Brotherhood of Teamsters:
Oral Statement................................................. 44
Prepared Statement............................................. 46
Mr. Basil J. Barimo, Vice President, Operations and Safety, Air
Transport Association of America, Inc.:
Oral Statement................................................. 49
Prepared Statement............................................. 50
Mr. Christian A. Klein, Executive Vice President, Aeronautical
Repair Station Association:
Oral Statement................................................. 58
Prepared Statement............................................. 60

IS THE FLYING PUBLIC PROTECTED?
AN ASSESSMENT OF SECURITY AT FOREIGN REPAIR STATIONS

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Wednesday, November 18, 2009

U.S. House of Representatives,
Committee on Homeland Security,
Subcommittee on Transportation Security and Infrastructure
Protection,
Washington, DC.
The subcommittee met, pursuant to call, at 2:05 p.m., in
Room 311, Cannon House Office Building, Hon. Jackson Lee
[Chairwoman of the subcommittee] presiding.
Present: Representatives Jackson Lee, Himes, Titus, and
Olson.
Ms. Jackson Lee. The committee will come to order. The
subcommittee is meeting today to receive testimony on the
security of foreign repair stations. Our witnesses will help us
assess the security of these facilities and how stakeholders
have been working together to ensure the safety and security of
the traveling public.
I now recognize myself for an opening statement. I think it
is important to note that this hearing is crucial because all
of the stakeholders have finally come together. But I also
think this hearing is crucial in the backdrop of recent news
reports on the inspector's comments on foreign repair stations.
The general representation of that particular report is
unacceptable, and even though we are here to factually assess
where do we go next, we know we have a problem, and that
problem must be affixed and, it must be addressed quickly.
We are gratified that we have not only our representatives
from the Government, but we have representatives from the
private sector who we know has worked very hard on these
issues, and as well, we are pleased to have those who work in
these facilities to be present as well.
Just yesterday the TSA issued a notice of rulemaking, which
I will weave into our ultimate discussion, and I would applaud
that only to say that I will be interested in why it took so
long, what is the next step, and how we will be able to
proceed.
So we are here today to discuss the security of foreign
repair stations and how the Federal Government will carry out
an inspection program that will protect the flying public. I
have long been concerned with the safety and security of
aircraft repair stations and after following recent news
stories raising oversight problems, I decided to call this
hearing.
My view is that if the inspector general and the media are
discovering safety oversight issues, security vulnerabilities
may exist as well. Accordingly, we need to address these
comprehensively and immediately.
Congress is already on record asking TSA to develop a
security program for foreign repair stations. After years of
delay under the past administration, the agency has finally
released its notice of proposed rulemaking for repair station
security, which I just mentioned, and we applaud that.
But time is of the essence, and I might suggest that safety
and security are very much intertwined. Vulnerabilities in
safety are open doors on the question of security. Codifying
the security oversight of foreign repair stations has never
been more essential. According to the Department of
Transportation's inspector's general, major air carriers
outsourced 67 percent of maintenance costs in 2007 compared to
37 percent in 1996.
Further, between 1994 and 2008 the number of FAA-certified
foreign repair stations has more than doubled from 344 to 709.
One might accept that as positive growth, and I do recognize
that as our industry grows the need for repair stations
internationally is important.
But again, the question is how effective is the
certification and how concerned are those who are certifying in
issues of safety and security, and whether or not there needs
to be a collaborative effort between the Department of Homeland
Security and the Department of Transportation anyway that
security is as much an issue as safety.
Clearly, domestic air carriers are outsourcing more and
more repair maintenance work to foreign repair stations and
important questions have been raised about the security of
these stations and the security threat associated with their
workers. To be clear, I understand that we live in a globalized
economy, but we have to be sure that this is not at the expense
of security.
Today's hearing is not intended to end the use of foreign
repair stations, but from my perspective it is to enhance the
scrutiny to provide intense regulations and to determine
whether or not these efforts are as trustworthy and secure as
they possibly can be. But I believe it is also to determine
best practices.
With the passage of 2000 and 2003 FAA reauthorization
legislation Vision 100, Congress directed TSA to complete a
security review and audit of foreign repair stations that are
certified by the FAA. Because the rulemaking was long overdue,
Congress prohibited FAA in 2007 from certifying any new foreign
repair stations until TSA has released its regulation.
Almost 2 years later, I was so frustrated by the delay in
the issuance of the NPRM I included language in the TSA
authorization bill, H.R. 2200 that required TSA to release it
in consultation with FAA.
Now that the rulemaking has been released, I have several
questions and concerns. For example, the law requires
consultation and communication between TSA and FAA in
developing a risk assessment of these repair stations and in
suspending their certification should security discrepancies or
vulnerabilities remain unaddressed. It may need, in a new look
at this, more than consultation between the two entities.
It also directs FAA to revoke its certification should TSA
discover an immediate security risks at a repair station. While
this relationship between FAA and TSA forms a crux of an
effective security oversight program, the NPRM is unclear in
describing how the agencies will work together to implement
these processes and the aftermath of such.
Congress also needs clarification on the frequency of
security audits and inspections following TSA's initial review
of FAA-certified foreign repair stations. Although the law is
silent on this issue, we are interested in the agency
developing a program that will provide consistent and periodic
oversight of security at foreign repair stations.
In light of the issues I just raised, I look forward to
hearing more from TSA and FAA in order to acquire answers to my
concerns. From the second panel I want to hear about the extent
to which stakeholders have been consulted on NPRM and what they
feel should be included in any final rule.
We want to see the establishment of an effective robust
security oversight program for foreign repair stations so that
we can finally address a key vulnerability in the global
aviation system. We also want to address the question of the
utilization of American workers.
That is, I believe, a key element of security, and I hope
the second panel will address the utilization of American
workers. This subcommittee will continue to oversee the
implementation of this important security program and support
policies and protocols that will strengthen our homeland
security efforts.
The Chairwoman is now pleased to recognize the gentleman
from Texas, Mr. Olson, for an opening statement. The gentleman
is recognized.
Mr. Olson. Well, thank you, Madame Chairwoman. Thank you
for having this hearing today. Thank you to the witnesses for
coming and giving us your expertise on this important subject.
I am happy to be sitting in for Ranking Member Charlie Dent
today, and I would like to thank all the witnesses again for
been here. It is certainly nice to have TSA with us again and
very good to see the Department of Transportation and the
Federal Aviation Administration before this subcommittee.
As we all know, the responsibility for oversight of safety
and security of air transportation is divided between the FAA
and the TSA. But it is indeed essential that the FAA and the
TSA work jointly together on many aviation issues as they are
required to do so on the issue of foreign and domestic repair
stations.
Our second panel is a comprehensive panel of both views in
the industry. Everyone has a voice here today, and we should
really be able to explore all the issues related to foreign
repair station security. I look forward to a very productive
discussion.
In the aftermath of the terrorist attacks on September 11,
Congress tasked TSA with the responsibility of issuing
regulations on both domestic and foreign repair station
security by August 2004, and I understand that TSA announced a
notice of proposed rulemaking this week.
While it was disappointing that it took TSA over 6 years to
commence rulemaking process on repair station security, we do
appreciate and understand that TSA directed its limited
resources to more pressing security matters that developed as
higher priorities over the years.
There is no question that foreign repair station security
is important and that a potential vulnerability that bad
people, including terrorists, may exploit. However, we should
take note that despite the issuance by TSA of formal
regulations on repair station security, there are currently
security measures at foreign repair stations in place.
While we are aware of the Department of Transportation
inspector general's 2008 report that cited submissions of
concern regarding the FAA safety audits of repair stations, we
also acknowledge that the FAA take its responsibility very
seriously and is addressing the recommendations of the
inspector general to improve its oversight of repair stations.
We are also aware of the recent media reports of some
serious safety issues at a foreign repair station in Central
America, including the inadvertent crossing of engine wires on
a US Airways aircraft. The reality, however, is that those
instances are rare.
As both the Air Transportation Association and the
Aeronautical Repair Station Association here before the
committee today indicate in their written testimonies, security
of foreign repair stations exists and is very good. These
measures will only be enhanced by the more formalized
regulations that TSA has announced this week.
We should also be mindful that security does not begin and
end with the foreign repair station itself. There are many
layers of security and safety in place. In fact, Continental
Airlines, which is headquartered in Houston, a place the
Chairwoman and I know pretty well, employs a company policy
where Continental Airline employees accompany any aircraft that
was repaired at a foreign repair station to oversee the
compliance with FAA regulations.
Continental employees also inspect an aircraft after it
returns from a repair station and before it is put back into
flight. I understand most U.S. air carriers employ these
procedures. In fact, it was a US Airways employee who during
inspection discovered the crossed engine wires on the US
Airways aircraft that had been repaired abroad. The layers of
security and safety are working.
We live in a world becoming more globalized each day. The
airline industry has endured a very difficult decade. Airlines
are making business decisions that will enhance their
viability. To shut out the foreign repair station market would
be catastrophic.
We should also be mindful that international flights by
foreign air carriers into the United States has increased over
the last decade. That means many foreign aircrafts are being
repaired and maintained by U.S. repair stations. That means
more jobs here in the United States. In fact, I am told that in
the $50 billion repair station market, nearly $20 billion of
those dollars are generated in the United States and Canada.
In homeland security, we strive to strike a balance between
security and the free flow of information, commerce, and trade.
I believe that adequate security measures at foreign repair
stations are in place and that they will only be enhanced and
more formalized by TSA's repair station security regulations. I
look forward to working with both TSA and FAA on this issue.
Thank you very much, and I yield back the balance of my
time.
Ms. Jackson Lee. I thank the gentleman. The Chairwoman now
recognizes the witnesses that have come, and I wish to
acknowledge that other Members of the subcommittee are reminded
that in the committee rules opening statements may be submitted
for the record.
I welcome our first panel of witnesses. Our first witness
is Mr. Calvin Scovel, the inspector general at the Department
of Transportation. Mr. Scovel's office released a 2008 report
that raised serious concerns about FAA's oversight of foreign
repair stations.
Our second witness, Mr. Doug Dalbey, is the deputy director
of Flight Standards for Field Operations at FAA. His office set
standards for the certification oversight of foreign repair
stations.
I do want to note that the invitation went to the FAA
administrator, and I hope that our committee will have an
opportunity for the administrator to appear before this
committee as he has been invited, and I thank you for conveying
that message to them.
Our third witness is Cindy Farkus. Ms. Farkus is TSA's
assistant administrator in the Office of Global Strategies.
This office is responsible for security at foreign repair
stations. I should note, my welcoming of TSA's issuance of its
long overdue NPRM for securing these stations. We hope this
testimony today will be helpful in how TSA proceeds, and we
hope in your testimony or in the questioning you will advise us
of that.
I think today's hearing is going to be an important
discussion, and we welcome you. Without objection, the witness'
full statements will be inserted in the record. I now ask each
one witness to summarize his or her statement for 5 minutes
beginning with Mr. Scovel.
Mr. Scovel, you are recognized for 5 minutes.

STATEMENT OF CALVIN L. SCOVEL, III, INSPECTOR GENERAL,
DEPARTMENT OF TRANSPORTATION

Mr. Scovel. Madame Chairwoman, Congressman Olson, Members
of the subcommittee, we appreciate this opportunity to testify
on FAA's oversight of domestic and foreign repair stations. Air
carriers' use of repair stations has increased significantly,
both in the volume and type of repairs outsourced.
In 2007, nine major carriers sent over 70 percent of their
heavy airframe checks to repair stations, double what was sent
just 4 years earlier, and more than a quarter of these repair
stations were foreign. While most repair stations are domestic,
the number of foreign repair stations certificated by FAA has
more than doubled during the last 15 years to over 700.
Despite these increases, FAA's oversight lacks the rigor
needed to ensure repair stations meet FAA safety standards.
Over the past decade, we have consistently reported weaknesses
in FAA's oversight and have made numerous recommendations aimed
at removing these weaknesses and closing identified safety
gaps.
In addition, in 2003 we reported security vulnerabilities
at repair stations, including susceptibility to sabotage. While
FAA oversees repair station safety and operations, DHS and TSA
oversee their security.
Madame Chairwoman, we have previously provided copies of
our 2003 security report as were adapted by TSA because it
originally included sensitive security information, and I
request that this report be entered into the record at this
time.
Ms. Jackson Lee. Without objection, so ordered.*
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* The information has been retained in committee files.
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Mr. Scovel. Today I will discuss our longstanding concerns
with FAA's oversight and the actions still needed to improve
safety and security at repair stations. First, FAA continues to
lack the data need to effectively oversee its outsourced repair
work. In response to our past recommendations, FAA has
developed a process to identify both the type and volume of
outsourced repairs to pinpoint those that are safety critical.
However, we found this process fundamentally ineffective
because carriers voluntarily report this information and FAA
inspectors do not validate the data. FAA agreed to improve the
system, but the completion date has repeatedly slipped.
Improving its data collection would also help FAA locate
non-certificated facilities performing critical repairs. These
facilities operate without an FAA certificate and, therefore,
do not have the associated regulatory and quality control
requirements, including training and maintenance supervision.
Despite these vulnerabilities, neither FAA nor carriers
regularly inspect non-certificated facilities. In fact, we
found in 2005 that FAA had inspected only 4 of the 10
facilities we reviewed and was unaware that non-certificated
facilities performed the same type of work as certificated
repair stations, including engine replacements.
FAA relies heavily on carriers to oversee repair stations
and uses their audits to approve repair stations for air
carrier use, even if those carriers themselves have flawed
audit and quality assurance programs.
In addition, FAA does not specify how inspectors should
gather information needed to approve air repair stations, and
it may be months, even years, after stations are approved
before inspectors conduct on-site reviews.
As a result, maintenance issues at repair stations have
gone undetected. In one case, FAA inspectors found that more
than 100 mechanics at an approved repair station lacked the
specialized training required to work on that carrier's
aircraft.
Given these safety gaps, it is imperative that FAA take
long-overdue actions. Of key importance is the need for FAA to
obtain information on where critical maintenance is performed.
Without this information FAA will fail in its attempt to
implement a risk-based oversight approach and of key interest
to this committee, FAA will also have difficulty supporting TSA
as that agency prioritizes its scarce resources in order to
identify and address security gaps at repair stations.
Following our recommendations in 2003, Congress mandated
that FAA and TSA jointly review foreign repair stations to
assess risk and develop security programs according to risk
levels. Today that mandate remains unmet.
We recognize that this process will be a challenge given
that foreign repair stations are not subject to U.S. security
requirements, such as background checks, but it must be done.
Just this week TSA issued its proposed security rule, which is
an important step in closing security gaps at repair stations.
In addition, pending House and Senate reauthorizations for
FAA would put foreign repair stations in parity with domestic
stations on matters, such as drug and alcohol testing and
education and licensing of maintenance personnel.
Until FAA has fully addressed our on-going safety and
security concerns, we will continue to monitor carefully its
progress in working with TSA and improving its oversight of
aircraft repair facilities.
This concludes my statement, Madame Chairwoman. I would be
happy to answer any questions you or other Members of the
subcommittee may have.
[The statement of Mr. Scovel follows:]

Prepared Statement of Calvin L. Scovel, III

Madame Chairwoman and Members of the subcommittee: We appreciate
the opportunity to testify on the Federal Aviation Administration's
(FAA) oversight of repair stations. As you know, air carriers have long
contracted out maintenance to repair facilities to reduce operating
costs or obtain specialized repair services from manufacturers. While
the large majority of repair stations are domestic, the number of
foreign repair stations that FAA has certified has more than doubled
over the past 15 years.
Since 2003, we have consistently found that FAA's oversight of
aircraft repair facilities is not robust enough to ensure that
outsourced repairs meet FAA standards, and we have made numerous
recommendations aimed at improving this oversight. Today, I will focus
on two key concerns: (1) Significant weaknesses we have identified with
FAA's oversight, and (2) actions needed to improve safety oversight and
security at repair stations.
In summary, safety oversight and security of repair stations cannot
be ensured in part because FAA does not know where critical outsourced
repairs are being performed--including both certificated and non-
certificated facilities. Instead, it relies heavily on air carriers'
oversight of repair stations--even air carriers with identified quality
assurance problems. Given these weaknesses, a number of actions,
including implementing our past recommendations, are needed to improve
the safety oversight and security of repair stations.

BACKGROUND

Repair stations conduct a range of repairs and maintenance, from
critical components--such as landing gear and engine overhauls--to
heavy airframe maintenance checks, which are a complete teardown and
overhaul of the aircraft. Currently, there are 4,858 FAA-certificated
repair stations, 4,126 of which are located in the United States. Since
1994, the number of FAA-certificated foreign repair stations has
increased from 344 to 731. Figure 1 shows worldwide locations of FAA-
certificated repair stations.

[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]

Air carriers' use of repair stations has risen dramatically in the
last several years--both in the volume and type of repairs outsourced.
As shown in figure 2, between 1996 and 2008, the percentage of
outsourced maintenance increased from 37 percent to 64 percent (based
on dollars spent). The first two quarters of fiscal year 2009 indicate
that this trend is likely to continue, as 63 percent of maintenance
expense was outsourced as of June 2009.

[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]

The nine major air carriers we reviewed sent 71 percent of heavy
airframe checks to repair stations in 2007, up from only 34 percent in
2003 (see figure 3). Foreign repair stations performed 27 percent of
this work, compared to 21 percent in 2003.

[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]

While FAA oversees repair station safety and operations, the
Department of Homeland Security's (DHS) Transportation Security
Administration (TSA) oversees aviation security, including repair
stations.\1\ To fulfill their statutory obligations, FAA and TSA must
collaborate on repair station activity, such as the type of work
performed and facility location (airport or non-airport).
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\1\ In 2003, TSA was transferred from the Department of
Transportation (DOT) to DHS.
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FAA'S OVERSIGHT LACKS THE RIGOR NEEDED TO ENSURE THE SAFETY OF
OUTSOURCED MAINTENANCE

Consistent with our recommendations, FAA has begun taking a risk-
based approach to overseeing repair facilities. Generally, this
approach was developed to target FAA's limited inspector resources to
those facilities posing the greatest safety risk. However, FAA lacks
the information on certificated and non-certificated facilities to
successfully implement such an approach. At the same time, FAA relies
heavily on air carriers' audits to approve repair stations to perform
substantial maintenance--even air carriers with identified quality
assurance problems. These weaknesses undermine FAA's efforts to target
surveillance to high-risk areas.

FAA Lacks the Data and Processes To Identify Facilities That Perform
Critical Repairs
In 2003, we reported \2\ that despite the growth in outsourcing,
FAA's oversight continued to target air carriers' in-house facilities--
even when high volumes of repairs, including critical maintenance, were
outsourced. For example, in 2002, FAA completed 400 in-house
maintenance inspections for 1 air carrier but only 7 inspections of its
outsourced maintenance, which comprised 44 percent of the carrier's
maintenance costs that year.
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\2\ OIG Report Number AV-2003-047, ``Review of Air Carriers' Use of
Aircraft Repair Stations,'' July 8, 2003. OIG reports and testimonies
are available on our website: www.oig.dot.gov.
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FAA has been challenged to shift its oversight to external
facilities because it lacks the data and processes for identifying and
tracking the types of maintenance outsourced and the facilities air
carriers use. For example, air carriers are required to provide and FAA
must approve substantial maintenance providers--repair stations that
can conduct major repairs on an air carrier's aircraft. However, the
list does not always represent the facilities air carriers actually use
or show the quantity of work they send to each facility. In one
example, we found a foreign repair station was designated a
``substantial maintenance provider'' for a major U.S. carrier even
though it had not conducted any significant maintenance for the air
carrier in almost 3 years.
In 2003 and in 2008,\3\ we recommended that FAA determine what type
of repairs air carriers send to repair stations and which repair
stations carriers use the most. In response, FAA set up a system \4\
for air carriers and repair stations to report outsourced repairs.
However, the system is unreliable because it is based on voluntary
reporting--both for volume of repairs and locations of critical
repairs. Moreover, FAA inspectors do not validate the reported data. As
a result of these weaknesses, FAA cannot determine the type of repairs
air carriers outsource or the facilities they use and target its
oversight accordingly.
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\3\ OIG Report Number AV-2008-090, ``Air Carriers' Outsourcing of
Aircraft Maintenance,'' September 30, 2008.
\4\ The system, known as the Quarterly Utilization Report, was
developed by FAA in fiscal year 2007.
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Non-Certificated Repair Facilities Perform Critical Maintenance With
Little FAA Oversight and Often Without FAA's Knowledge
FAA regulations permit air carriers to use non-certificated repair
facilities as long as the mechanics approving the repairs are
certificated and the air carrier oversees the work performed. However,
as we reported in December 2005,\5\ the use of non-certificated repair
facilities can also create safety vulnerabilities. Because these
facilities do not operate under FAA repair station certificates, they
are not required to comply with associated regulatory and quality
control standards. For example, non-certificated facilities are not
bound by FAA operating requirements, such as maintaining a quality
control system. Unlike domestic certificated repair stations, there is
no requirement for non-certificated repair facilities to employ
supervisors and inspectors to monitor maintenance work as it is being
performed. Non-certificated repair facilities are also not required to
have an aircraft hangar in which to operate. In fact, of the 10 non-
certificated repair facilities we visited, two were operated by only
one mechanic with a truck and basic tools.
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\5\ OIG Report Number AV-2006-031, ``Review of Air Carriers' Use of
Non-Certificated Repair Facilities,'' December 15, 2005.
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In addition to not being bound by FAA operational requirements,
non-certificated facilities can perform a vast array of scheduled \6\
and critical repair work, including engine replacements. When we
reported this finding in 2005, FAA was unaware that domestic and
foreign non-certificated facilities performed the same type of work as
FAA-certificated repair stations--not just minor aircraft work on an
as-needed basis, as was widely believed. We examined records at three
air carriers and identified six domestic and foreign non-certificated
facilities that performed scheduled maintenance and 21 that performed
maintenance critical to the airworthiness of the aircraft.\7\
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\6\ This maintenance is required to be performed at regularly
scheduled times, such as inspections required after the aircraft has
flown a designated number of hours (e.g., inspections of crew and
passenger oxygen, aircraft fuselage, wings, and engines).
\7\ ``Airworthiness'' means the aircraft conforms to its approved
design and is in a condition for safe operation.
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Despite these vulnerabilities, neither FAA nor air carriers
regularly conduct on-site reviews of non-certificated facilities. In
fact, FAA had not inspected 6 of the 10 domestic and foreign non-
certificated facilities we reviewed. According to FAA, the quality of
repair work at non-certificated facilities is ensured because the
mechanics at these facilities hold FAA certificates. However, as we
reported in 2005, some mechanics at these facilities are also temporary
personnel and neither the carrier nor FAA ensures that their work meets
FAA standards. Moreover, repair station certification involves
additional controls to ensure repairs are performed properly.
Specifically, certificated facilities have approved quality control
systems, undergo multiple levels of oversight, and have recurring
training programs. It is incumbent upon FAA to determine which non-
certificated facilities perform critical and scheduled maintenance \8\
so that it can target inspections accordingly or limit the type of work
these facilities can perform.
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\8\ Gathering data on locations and carrier use of non-certificated
facilities is possible, as we were able to do so by conducting a
detailed analysis of air carrier maintenance vendor lists.
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FAA Relies on Air Carriers With Known Quality Assurance Problems To
Provide Oversight of Repair Stations
Last year, we reported that FAA does not specify how its air
carrier inspectors should gather information needed to approve FAA-
certificated repair stations to perform substantial maintenance.
Instead, FAA allows inspectors to use an air carrier's initial audit as
a basis for approval even when inspectors determined that the carrier's
audit processes and quality assurance programs had problems, such as
limited quality assurance staff and inaccurate reporting of audit
findings.
We found it may be months or even years before FAA inspectors do an
on-site review after FAA has approved a repair station for carrier use.
For example, over a 3-year period, FAA inspectors for an air carrier
inspected only 4 of its 15 substantial maintenance providers. Among
those uninspected was a major foreign engine repair facility. The
inspectors did not visit this facility until 5 years after FAA approved
this facility for carrier use although the repair station had worked on
39 of the 53 engines repaired for the air carrier.
As a result of FAA's flawed approval and untimely inspection
processes, maintenance problems either went undetected or reoccurred.
For example, FAA inspectors relied on one carrier's initial audit
report to approve a repair station for use, but they later found during
a site visit that more than 100 mechanics had not received specialized
maintenance training prior to working on the carrier's aircraft. At
other repair stations that did not receive timely FAA inspections,
problems existed such as untrained mechanics, lack of required tools,
and unsafe storage of aircraft parts. While these problems were not
immediate safety-of-flight issues, they could have affected aircraft
safety over time if left uncorrected.

ACTIONS NEEDED TO IMPROVE THE SAFETY OVERSIGHT AND SECURITY OF REPAIR
STATIONS

Several of our recommendations aimed at improving FAA's oversight
of foreign and domestic repair stations remain open. Successfully
implementing these recommendations would allow FAA to identify and
target repair facilities in need of safety oversight as well as meet
its statutory mandate to provide TSA with information needed to improve
security oversight.

Recommendations To Improve FAA Oversight of Repair Stations Remain
Unaddressed
Over the last 7 years, we have made a total of 23 recommendations
intended to improve FAA's safety oversight of domestic and foreign
repair stations; 16 of these recommendations remain unaddressed (see
exhibit)--a number of which are critical. FAA made progress by
implementing seven of the nine recommendations we made in 2003,
including improved inspection processes for foreign authorities
overseeing FAA-certificated facilities. However, the two that remain
open from that report are ones that, if implemented, would help FAA
target its oversight resources to facilities with the greatest safety
risk. We also made seven recommendations in 2005 to improve oversight
of non-certificated facilities, but FAA has yet to propose actions to
address them.
While FAA has proposed actions for each of the seven
recommendations we made in 2008, it has yet to complete any of them,
including those that are relatively straightforward and key to
implementing other improvements. For example, FAA has not reassessed
its definition of substantial maintenance \9\ to include all critical
components, such as landing gear. We reported that omissions such as
these can lead to wide disparities in air carriers' reports of
locations performing repairs of critical components, which in turn
limits FAA's ability to assess risk.
---------------------------------------------------------------------------
\9\ FAA inspection guidance defines substantial maintenance as
major airframe maintenance checks; significant engine work; major
alterations or major repairs to airframes, engines, or propellers;
emergency equipment repairs; and aircraft painting.
---------------------------------------------------------------------------
Some actions that FAA has taken to address our recommendations are
insufficient, including its voluntary system for reporting outsourced
repairs, which has not provided reliable or FAA-validated data. FAA
agreed to improve its reporting system by March 2009, but the
completion date has slipped repeatedly. Completing this recommendation
would also help FAA address other long-standing issues, such as
locating non-certificated facilities performing critical repairs and
improving their quality controls.
FAA states it will implement other recommendations by December 31,
2009, pending inspector and industry responses on redefining
substantial maintenance. However, given that FAA has taken little
action to date, it is questionable how it will implement these
recommendations as planned. We will continue to monitor FAA's progress
in effectively implementing all recommendations.

FAA Must Identify Critical Maintenance Locations To Effectively
Collaborate With TSA in Improving Security at Repair Stations
In addition to the safety oversight gaps we have reported, we have
identified security vulnerabilities at repair stations located at
commercial and general-aviation airports and off-airport property. We
issued a report in 2003 \10\ disclosing these vulnerabilities and
recommended that TSA and FAA assess repair stations to identify the
greatest security risks--including susceptibility to sabotage--and
develop security programs appropriate to the significance and
criticality of the work performed. Implementing effective security
programs will be a challenge for both TSA and FAA because foreign
facilities are not subject to U.S. security requirements. The level and
depth of security programs in other countries, including background
checks, are subject to Government requirements in the country where the
repair station operates.
---------------------------------------------------------------------------
\10\ OIG Report, ``Review of Security at Aircraft Repair
Stations,'' February 28, 2003.
---------------------------------------------------------------------------
Due in part to our recommendations in 2003, Congress enacted FAA's
2003 Vision 100 Century of Aviation Reauthorization (Vision 100),\11\
which mandated TSA to complete large-scale security reviews of FAA-
certificated foreign repair stations and issue final regulations by
August 2004 to improve the security of foreign and domestic repair
stations. TSA did not meet the 2004 deadline (see figure 4).
---------------------------------------------------------------------------
\11\ Pub. L. No. 108-176 (2003).

[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]

In the August 2007 9/11 Commission Recommendation Act, Congress
included a provision that if TSA did not issue a repair station
security rule by August 2008, FAA would be barred from certifying any
new foreign repair station.\12\ Again, TSA was not able to meet the
deadline, and FAA was barred from certifying any new foreign repair
stations. However, TSA announced on November 16, 2009, that its
proposed rule is now open for public comment.
---------------------------------------------------------------------------
\12\ H. Rep. No. 1, section 1616(a) (2007).
---------------------------------------------------------------------------
Pending Legislation Would Address Regulatory Gaps in Oversight of
Foreign Repair Stations
Congress is introducing new bills to close other regulatory gaps
between foreign and domestic repair stations that we have identified in
our past work. While FAA verifies that approved repair stations have
the equipment, personnel, and inspection systems to ensure that repairs
are completed according to FAA standards, the repair stations are under
the regulatory control of the government of the country in which they
are located. As a result, there are some regulatory differences between
domestic and foreign repair stations (see table 1).

TABLE 1.--DIFFERENCES BETWEEN DOMESTIC AND FOREIGN FAA-CERTIFICATED
REPAIR STATIONS
------------------------------------------------------------------------
Domestic Foreign
------------------------------------------------------------------------
Duration of FAA Certificate:
Certificate lasts indefinitely........ Certificate must be renewed
every 1 to 2 years.
Fees for Certification:
None.................................. Pay FAA for certification
and renewal costs.
Drug and Alcohol Testing Program:
Required.............................. Not required.
Certificated Mechanics:
Certain personnel, such as return-to- Personnel are not required
service and supervisory personnel, to be FAA-certificated.
must be FAA-certificated. (Note: Personnel must meet
certain training and
qualification requirements.
Mechanics may be
certificated by the
aviation authority where
they are located.)
------------------------------------------------------------------------
Note: For domestic and foreign non-certificated facilities, the
personnel approving repairs must be FAA-certificated.

The pending House and Senate FAA reauthorization bills contain
language requiring drug and alcohol testing of employees in foreign
FAA-certificated repair stations. The House bill also contains language
to harmonize the safety standards between foreign and domestic repair
stations, including standards governing maintenance requirements,
education, and licensing of maintenance personnel, training, oversight,
and mutual inspection of work sites. If passed, these bills will
provide for greater consistency in rules governing repair station
operations.
In conclusion, Madame Chairwoman, with the growing trend in
outsourcing aircraft repairs, it is imperative that FAA improve its
oversight of repair facilities--both domestic and foreign--to ensure
that safety measures are being adequately applied to affected carriers.
Expeditiously implementing our longstanding recommendations would go a
long way toward ensuring safety.

EXHIBIT.--FAA'S ACTIONS TO ADDRESS OIG RECOMMENDATIONS

----------------------------------------------------------------------------------------------------------------
Recommendations: 2003
Review of Air Carriers' Use FAA Propose Action? FAA Complete Action?
of Aircraft Repair Stations
----------------------------------------------------------------------------------------------------------------
1.................................. Collect and monitor air Yes................... No.
carrier maintenance
financial data to identify
trends in the source of
maintenance and make
shifts in inspector
resources as warranted.
2.................................. Develop a process to: (a) Yes................... No.
Identify repair stations
that air carriers use to
perform aircraft
maintenance; (b) identify
the repair stations that
are performing safety
critical repairs; and (c)
target inspector resources
based on risk assessments,
or analysis of data
collected on air carrier
outsourcing practices.
3.................................. Implement procedures to Yes................... Yes.
improve information
sharing through FAA's
newly integrated Safety
Performance Analysis
System by: (a) Requiring
certificate management
inspectors to document the
name of the repair
stations they have
reviewed in the Air
Transportation Oversight
System database; and (b)
requiring district office
inspectors to include the
areas inspected, the
results, and corrective
actions taken in the
Program Tracking and
Reporting System.
4.................................. Develop a comprehensive, Yes................... Yes.
standardized approach to
repair station
surveillance by requiring
inspectors to review all
aspects of repair station
operations, from the time
the repair is received
until it is released to
the customer.
5.................................. Modify existing inspection Yes................... Yes.
documentation requirements
with foreign aviation
authorities so that FAA
receives sufficient
documentation to ensure
FAA-certificated repair
stations meet FAA
standards.
6.................................. Develop a process to Yes................... Yes.
capture results from: (a)
Foreign aviation authority
inspections; and (b) FAA
sample inspections of
foreign repair stations in
FAA's Program Tracking and
Reporting System.
7.................................. Develop procedures to Yes................... Yes.
verify that foreign
aviation authorities place
adequate emphasis on FAA
regulations when
conducting reviews at FAA-
certificated facilities.
8.................................. Clarify requirements with Yes................... Yes.
foreign aviation
authorities to ensure that
changes to FAA-
certificated foreign
repair stations'
operations that directly
impact FAA requirements
are sent to FAA for
approval.
9.................................. Modify procedures for Yes................... Yes.
conducting sample
inspections to permit FAA
inspectors to: (a) Conduct
the number of inspections
necessary to gain
assurance that foreign
aviation authority
inspections meet FAA
standards during the
initial implementation
periods when foreign
authorities conduct
inspections on FAA's
behalf; and (b) base the
number of inspections in
subsequent years on
analysis of data collected
from prior sample
inspections.
----------------------------------------------------------------------------------------------------------------
Note: The recommendations from our 2003 security report are not listed in this exhibit because TSA, not FAA, is
now responsible for those issue areas.

----------------------------------------------------------------------------------------------------------------
Recommendations: 2005
Review of Air Carriers' Use
of Non-Certificated Repair FAA Propose Action? FAA Complete Action?
Facilities
----------------------------------------------------------------------------------------------------------------
1.................................. Inventory air carrier No.................... No.
vendor lists that include
all maintenance providers
working on air carrier
aircraft and identify non-
certificated repair
facilities performing
critical or scheduled
maintenance.
2.................................. Determine whether it should No.................... No.
limit the type of work non-
certificated facilities
can perform.
3.................................. Expand its maintenance No.................... No.
oversight program to
include non-certificated
repair facilities if no
limitations are placed on
the type or scope of work
they perform.
4.................................. Review air carrier training No.................... No.
programs as part of FAA's
oversight of air carrier
operations to ensure
mechanics at non-
certificated repair
facilities: (a) Are
qualified to maintain
aircraft in accordance
with FAA and air carrier
requirements, and (b)
receive training for
critical repairs that is
equivalent to the training
provided to air carrier
mechanics performing the
same type of repairs.
5.................................. Review air carrier training No.................... No.
programs to ensure
mechanics at non-
certificated repair
facilities have been
adequately trained on
preparing maintenance
records in accordance with
FAA and air carrier
procedures.
6.................................. Review air carriers' audit No.................... No.
programs for non-
certificated repair
facilities as part of its
oversight of air carrier
operations to ensure each
carrier has established a
standard and in-depth
process for evaluating
these facilities.
7.................................. Determine whether air No.................... No.
carriers evaluate the
background, experience,
and qualifications of the
temporary maintenance
personnel used by
contractors to ensure the
work they perform is
completed in accordance
with FAA and air carrier
requirements.
----------------------------------------------------------------------------------------------------------------
Note: FAA concurred with our 2005 report recommendations but has not proposed corrective actions.

----------------------------------------------------------------------------------------------------------------
Recommendations: 2008
Review of Air Carriers'
Outsourcing of Aircraft FAA Propose Action? FAA Complete Action?
Maintenance
----------------------------------------------------------------------------------------------------------------
1.................................. Improve its maintenance Yes................... No.
data reporting system by:
(a) Revising its guidance
to include all maintenance
providers performing
repairs of critical
components, not just the
top 10 substantial
maintenance providers; and
(b) developing procedures
for inspectors to validate
the accuracy and
consistency of reports.
2.................................. Require CMO inspectors to Yes................... No.
conduct: (a) Initial
baseline inspections of
substantial maintenance
providers to assess
whether the maintenance
providers are in
compliance with air
carriers' procedures; and
(b) follow-up inspections
to determine whether this
baseline assessment has
changed.
3.................................. Reassess its definition of Yes................... No.
substantial maintenance to
include critical
components and ensure that
air carriers and FAA
offices consistently apply
the definition.
4.................................. Require inspectors to: (a) Yes................... No.
Follow up to verify that
deficiencies identified by
air carriers have been
corrected at repair
stations; and (b) ensure
that air carriers and
repair stations have
adequate processes for
conducting audits,
correcting identified
deficiencies, and
performing trend analyses
of findings.
5.................................. Develop controls to ensure Yes................... No.
inspectors are complying
with inspector guidance to
document their findings in
FAA's inspection database
and review the inspection
database for previous
findings.
6.................................. Ensure air carriers Yes................... No.
document inspections
conducted by air carriers'
on-site technical
representatives at heavy
airframe maintenance
providers.
7.................................. Encourage the industry best Yes................... No.
practice of using
airworthiness agreements
between air carriers and
repair stations that more
clearly define maintenance
procedures and
responsibilities.
----------------------------------------------------------------------------------------------------------------

Ms. Jackson Lee. Thank you for your testimony, and I now
recognize Mr. Dalbey to summarize his statement for 5 minutes.

STATEMENT OF DOUG DALBEY, DEPUTY DIRECTOR OF FLIGHT STANDARDS
FOR FIELD OPERATIONS, FEDERAL AVIATION ADMINISTRATION,
DEPARTMENT OF TRANSPORTATION

Mr. Dalbey. Chairwoman Jackson Lee, Congressman Olson, and
Members of the subcommittee, thank you for inviting me here
today to discuss the security of foreign repair stations. As
you know, TSA has responsibility for oversight of repair
station security.
FAA's expertise is in aviation safety, and we have been and
continue to be willing to coordinate with TSA with regard to
our respective missions and provide any aviation safety
expertise TSA may need to implement its security rules for
repair stations.
In keeping with the subject of today's hearing and at the
request and direction of the subcommittee staff, I will focus
my comments today on the FAA safety oversight of foreign repair
stations.
The FAA's responsibility for safety oversight means that we
determine that the work accomplished at the repair stations is
being performed in accordance with the Federal Aviation
Regulations and the air carriers' approved maintenance program.
Our oversight is based on risk analysis. This is our
process where we examine detailed safety data to recognize
important trends and spot potential safety problems in order to
prevent them. Where we see the greatest safety risk is where we
focus our oversight.
Prior to issuing a certificate to a foreign repair station,
the FAA must determine that the facility meets the same
performance criteria that apply to domestic repair stations.
Specifically, the FAA determines that the repair station
possesses the appropriate housing, facilities, equipment, and
trained personnel to perform according to the FAA safety
standards.
Currently, the FAA has certificated over 700 foreign repair
stations. In order to ensure comparable safety standards
despite geography, foreign repair stations must submit to
recertification every 12 to 24 months, something not required
of domestic repair stations. We require at least one
comprehensive in-depth inspection prior to the renewal of a
certificate.
In the years that the FAA does not perform a renewal
inspection, the FAA performs annual surveillance according to
defined work program guidelines. Foreign repair stations also
must show they have customers with U.S.-registered aircraft or
customers with parts used on U.S.-registered aircraft for which
an FAA certificate is required.
In addition to FAA safety oversight, the foreign repair
stations must undergo the safety oversight of their own
National Aviation Authority. On top of that, the air carriers
constitute a third layer of oversight. Ultimately, air carriers
are responsible for overseeing all maintenance done on their
aircraft by any maintenance provider.
Air carriers are required to have a quality management
system for monitoring and analyzing the performance and
effectiveness of their maintenance programs. The air carrier's
quality management system enables the carrier to track any
problems with repair stations and check for similar maintenance
errors throughout their fleet.
While we are confident in the effectiveness of our
oversight regime, our efforts to improve oversight are on-
going, and we are committed to maximizing our already robust
safety oversight system. Our efforts have also included work to
address specific areas where the IG has made recommendations.
I understand and appreciate this subcommittee's concerns
about the security of repair stations abroad. On that point, I
reaffirm our willingness to lend our aviation safety expertise
to assist the TSA. I want to assure you that we are committed
to making advancements and adjustments in our safety oversight
to ensure the highest standards of maintenance at foreign
repair stations.
Madame Chairwoman, Congressman Olson, Members of the
committee, this concludes my prepared remarks. I would be happy
to answer any questions that you might have.
[The statement of Mr. Dalbey follows:]

Prepared Statement of Doug Dalbey
November 18, 2009

Chairwoman Jackson Lee, Congressman Dent, Members of the
subcommittee: Thank you for inviting me here today to discuss the
security of foreign repair stations. As you are undoubtedly aware, the
Department of Homeland Security (DHS) and the Transportation Security
Administration (TSA) have responsibility for ensuring adequate security
at repair stations, both foreign and domestic. Vision 100--Century of
Aviation Reauthorization Act required the TSA, in consultation with the
Federal Aviation Administration (FAA), to issue a final rule imposing
security standards on all repair stations. Although the FAA's expertise
is in aviation safety, not security, we have offered our comments and
assistance when requested, and have worked with the TSA to facilitate
their on-going pre-rule site visits. As always, we stand ready to
provide any additional aviation safety expertise the TSA may need in
its on-going effort to promulgate a rule that will ensure the highest
levels of security.
While the TSA is responsible for security oversight, the FAA is
responsible for safety oversight--determining that the work
accomplished at the repair station is being performed in accordance
with the Federal Aviation Regulations and the air carrier's approved
maintenance program. Previously, our oversight was based largely on
inspector knowledge and information that was available as the result of
individual inspections. As the business model for aviation maintenance
has undergone changes, so has the FAA's approach to safety oversight--
we have added new methods of tracking and identifying safety risks to
strengthen our oversight of both air carriers and repair stations.
Instead of relying solely on information from individual
inspections, we now perform a sophisticated analysis of anomalies
identified and entered into our system. This analysis provides us with
trend information that effectively targets our oversight. Specifically,
the new Safety Performance Analysis System and Repair Station
Analytical Model tools give safety inspectors the basis to evaluate a
repair station, prioritize surveillance, and target our resources to
the highest risk areas. We recognize that this risk-based approach can
be successful only when our data is detailed and accurate. As a result,
we are actively working to further refine our inspection and data-
gathering processes. This approach enables us to recognize important
trends and spot potential problems in order to prevent them. The new
surveillance system and accompanying analytical tools are not only a
better use of FAA resources, they will enhance safety.
In keeping with the subject of today's hearing and at the request
and direction of the subcommittee's staff, I will briefly discuss the
FAA's safety oversight of foreign repair stations. Currently, there are
over 700 FAA-certificated foreign repair stations. Prior to issuing a
certificate to a foreign repair station, the FAA must determine that
the facility meets the same exacting performance criteria that apply to
domestic repair stations. Specifically, the FAA determines that the
repair station possesses the appropriate housing, facilities, equipment
and trained personnel to perform repairs according to FAA standards.
In order to ensure comparable safety standards, despite geography,
foreign repair stations must submit to periodic recertification which
is not required of domestic repair stations. Our current requirements
mandate that every foreign repair station undergo at least one
comprehensive, in-depth inspection prior to the renewal of its
certificate. This inspection encompasses all of the repair station
areas of responsibility under 14 CFR part 145, makes certain the
original certification requirements continue to be met, and ensures
that the station performs maintenance functions in accordance with the
air carrier's FAA-approved program. In the years the FAA does not
perform a renewal inspection, the FAA performs annual surveillance
according to defined work program guidelines.
Also, foreign repair stations must show they have customers with
U.S.-registered aircraft or customers with parts used on U.S.-
registered aircraft, for which an FAA certificate is required.
While the standards for inspections at foreign and domestic repair
stations remain the same, the promulgation of international agreements
has impacted FAA foreign repair station certification and surveillance
activities. The Bilateral Aviation Safety Agreement with Maintenance
Implementation Procedures (BASA/MIP) is a ``country-to-country
agreement'' with primary focus on the harmonization of maintenance
rules and requirements and safety standards for those entities
performing maintenance activities. These agreements, which the United
States has with France, Germany, and Ireland, remove duplicative
efforts by the FAA and the national aviation authority and provide for
each authority to perform certification and surveillance activities on
behalf of the other, while reserving the right of each country to
certificate or renew certification of the 174 relevant repair stations.
In addition to FAA and foreign national aviation authorities, air
carriers constitute a third layer of oversight. Ultimately, FAA
regulations place responsibility for overseeing all maintenance done on
their aircraft by any maintenance provider with the air carrier. Air
carriers are required to have a quality management system, which we
call the ``continuous analysis and surveillance system'' (CASS), for
monitoring and analyzing the performance and effectiveness of their
maintenance programs. If any repair station returns an aircraft to the
air carrier with problems or the air carrier had to reject repair work
for any reason, then the air carrier's quality management system would
enable the carrier to track the problem and check for similar
maintenance errors in its fleet.
While we are confident in the effectiveness of our oversight
regime, our efforts to improve oversight are on-going and we are
committed to maximizing our already robust safety oversight system. In
2003, we implemented revised regulations applicable to repair stations
including improved equipment requirements, and more detailed criteria
for the use of external maintenance providers by repair stations. Our
efforts have also included work to address specific areas where the
Department of Transportation Office of the Inspector General (IG) has
made recommendations. In 2005, we issued guidance to enhance oversight
of repair stations based on system safety requirements and risk
assessment. In 2006, we developed and implemented software to further
enhance our oversight, risk assessment, and risk management processes.
We have also improved our Safety Performance Analysis System to provide
enhanced information sharing. Additionally, we have strengthened the
training requirements for certain repair station personnel.
In September 2008, the IG's office issued its most recent report on
repair stations, along with seven new recommendations. Some of our most
recent actions include: (1) Implementing procedures to improve
information sharing through FAA's newly integrated Safety Performance
Analysis System; (2) modifying existing inspection documentation
requirements with foreign aviation authorities to ensure the FAA
receives sufficient documentation; (3) developing a process to capture
results from foreign aviation authority inspections and FAA sample
inspections of foreign repair stations in our Program Tracking and
Reporting System; and, (4) modifying procedures for conducting sample
inspections. We are committed to enhancing our essential oversight
capabilities and will continue looking for ways to do so.
Just as aviation safety is in no way compromised by allowing U.S.
carriers to fly aircraft made in Europe, in Brazil, or in Canada,
safety is in no way compromised by allowing other countries' facilities
which perform to our safety standards, to conduct repair and
maintenance on our aircraft. However, we fully embrace the crucial role
oversight must play in ensuring quality maintenance operations--
regardless of where they are conducted. I understand and appreciate
this subcommittee's concerns about the flying public and assure you
that we are committed to making advancements and adjustments in our
safety oversight to ensure the highest standards of maintenance at
foreign repair stations. As always and in every aspect, the FAA is
focused on finding ways to improve upon this historically safe period
in U.S. aviation. I also understand and appreciate this subcommittee's
concerns about the security of repair stations abroad. On that point, I
reaffirm our willingness to lend our aviation safety expertise to
assist the TSA.
Madame Chairwoman, Congressman Dent, Members of the subcommittee,
this concludes my prepared remarks. I would be happy to answer any
questions that you might have.

Ms. Jackson Lee. Thank you very much, Mr. Dalbey, and I
would like to now recognize Ms. Farkus to summarize her
statement for 5 minutes.

STATEMENT OF CINDY FARKUS, ASSISTANT ADMINISTRATOR, GLOBAL
STRATEGIES, TRANSPORTATION SECURITY ADMINISTRATION, DEPARTMENT
OF HOMELAND SECURITY

Ms. Farkus. Good afternoon, Chairwoman Jackson Lee, Mr.
Olson, and distinguished Members of the subcommittee. Thank you
for the opportunity to discuss the security of aircraft repair
stations. I am pleased to appear on the panel with Mr. Scovel
and Mr. Dalbey as we all work to protect the safety and
security of our country's civil aviation network.
I appreciate the subcommittee's attention to this issue as
TSA has just this week proposed standards for security measures
at FAA-certificated aircraft repair stations at home and
abroad. Civil aviation remains a target of terrorist activity
worldwide. With this proposed rule, the United States leads the
way toward comprehensive repair station security standards.
Throughout development of the proposed rule, TSA has
adhered to the principles that the agency should, No. 1, listen
carefully to the diversity of interest concerning the rule. No.
2, ensure that the rule's proposed standards are risk-based.
No. 3, provide appropriate flexibility to accommodate the range
of repair station characteristics, and No. 4, complement FAA's
safety regime.
TSA is proposing that FAA-certificated repair stations
carryout a security program that clearly defines access
controls for facilities, as well as aircraft and components.
The security program must also establish measures to identify
employees and others with access and restrict access by
unauthorized individuals.
It must describe the means used by the repair station to
provide security awareness training, employee background
checks, and designation of a security coordinator. Importantly,
the proposed rule would codify TSA inspection authority to
examine repair station property, facilities, and records in
order to assess security and enforce security regulations.
Consistent with Vision 100, under the proposed rule TSA
would notify a repair station and the FAA of there are
deficiencies in the security program and provide 90 days for a
repair station to correct deficiencies. If not corrected within
90 days, TSA would notify the FAA that it must suspend the
station's certificate until the deficiencies are resolved.
A process would be provided so that a repair station could
request further review of the deficiency determination. In
addition, the rule addresses the process for revoking the
certification of a repair station that is determined to pose an
immediate risk to security.
While developing the proposed rule, TSA collected
information on repair stations through voluntary site visits
and outreach efforts to assess the current state of aircraft
repair station security measures around the world.
Upon finalization of the rule, TSA will be prepared to
quickly follow through with audits of foreign repair stations
within 6 months as required by the 9/11 Act. TSA currently has
13 international inspectors fully trained and deployed overseas
to conduct repair station audits and has provided supplemental
repair station inspection training to over 120 domestic
transportation security inspectors.
We had developed a comprehensive database with detailed
repair station information that will help serve as an
inspection scheduling and tracking tool. Scheduling of TSA on-
site inspections will be coordinated with FAA inspections.
We have learned through joint visits that this maximizes
inspection efforts and promotes the efficient use of resources
for both the government and repair stations. These coordination
efforts will apply to repair stations currently certificated,
those waiting for certification and those that apply in the
future.
In closing, TSA is committed to working with our
stakeholders, both foreign and domestic, in developing a rule
that is flexible, viable, and takes into consideration the
efforts already put forth at repair stations to secure their
environment from the threat of terrorism.
TSA strongly encourages all interested parties and
stakeholders to review the proposed rule and welcomes public
comment. Thank you for the opportunity to discuss our plans for
ensuring the security of repair stations and our proposed
regulations. I would be pleased to respond to your questions.
[The statement of Ms. Farkus follows:]

Prepared Statement of Cindy Farkus
November 18, 2009

Good afternoon Chairwoman Jackson Lee, Ranking Member Dent, and
distinguished Members of the subcommittee. Thank you for the
opportunity to appear today to discuss the security of aircraft repair
stations. I appreciate the subcommittee's timely attention to this
issue as the Transportation Security Administration (TSA) prepares to
propose standards for security measures at aircraft repair stations and
provide assistance to our international partners in meeting those
standards. Today I will outline the steps we are taking to lay the
foundation for the security of Federal Aviation Administration (FAA)-
certificated aircraft repair stations located in the United States and
abroad.
I am pleased to appear along with Calvin Scovel III, Inspector
General of the U.S. Department of Transportation (DOT), and Doug
Dalbey, Deputy Director of Flight Standards for Field Operations at the
FAA. TSA coordinates with DOT officials across a broad spectrum of
domestic and international transportation security matters.
TSA, through both the Office of Global Strategies (OGS) and the
Aircraft Repair Stations Program in the Office of Security Operations
(OSO), works to develop and promote effective transportation security
practices both domestically and around the world. Through diplomatic
engagement and collaboration with our international partners, we are
creating mechanisms to share information to help disrupt threats
overseas, harmonize screening measures and practices, assess foreign
carriers and airports, and build aviation security capacity.
Repair stations are facilities certificated by the FAA to perform
maintenance, repair, overhaul, or alterations on U.S. aircraft or
aircraft components. Components may be engines, hydraulics, avionics,
safety equipment, airframes, or interiors. More than 4,000 repair
stations are certificated domestically, and 712 repair stations are
certificated by FAA in foreign locations. More than two-thirds of
certificated foreign repair stations are located in the European Union,
followed in number by locations in the Asia-Pacific, South and Central
America, the Middle East, Canada, Mexico, the Caribbean, and Africa.
The vast majority of repair stations are owned by private companies,
many of them headquartered in the United States.
There is no ``typical'' repair station. They take many forms
depending upon the type of maintenance performed, number of employees,
and location. Some repair stations are on airport premises, but many
are located in industrial parks nearby. Work can range from major
aircraft overhauls to repairing radios or sewing seat cushions.
This month TSA will propose regulations to enhance the security of
both domestic and foreign aircraft repair stations as required by the
Vision 100--Century of Aviation Reauthorization Act (Vision 100), Pub.
L. 108-176. The proposed regulations are aimed at preventing
unauthorized access to a repair station in order to prevent the
sabotage, destruction, or theft of aircraft or aircraft components.
The United States is leading the way in establishing repair station
security standards, as this is an area not covered comprehensively by
the International Civil Aviation Organization agreement. The proposed
regulations will cover requirements for repair stations certificated by
the FAA under 14 CFR part 145 to adopt and implement a standard
security program and to comply with security directives. The proposed
rule also will seek to codify the scope of TSA's existing inspection
program and TSA authority to enter, inspect, and test property,
facilities, and records concerning repair stations. Further, it will
focus on procedures for TSA to notify repair stations of deficiencies
in their security programs and determine whether there is an immediate
risk to security. The proposal will also cover the process for a repair
station to seek review of a determination that security deficiencies
are not adequately addressed or that there is an immediate risk to
security.
TSA has spent considerable time assessing the types and varieties
of repair station operations as well as the current state of aircraft
repair station security measures around the world. TSA has established
an aircraft repair station program office overseen by OSO, with the
international outreach efforts performed by OGS, and the agency has
hired and trained International Transportation Security Inspectors
(ITSIs). With the collaboration of host countries and corporate
offices, we have performed numerous voluntary site visits and outreach
efforts to FAA-certificated foreign repair stations. The site visits
provided valuable insight into the different types of facilities
certificated by FAA, the variety of repair work conducted at the
facilities, and the range of security measures used. During these
visits, TSA discussed best practices for access control and other
security measures. Worldwide, TSA found that aircraft repair stations
take security seriously and voluntarily perform security measures that
are consistent with the standards TSA is proposing. Aircraft repair
stations are eager to protect the high-value products of the customer
base they serve, which in itself is a substantial incentive to maintain
security at a high level.
The voluntary site visits have served the United States well in
fostering collaborative relationships with our international partners
as we break new ground in proposing comprehensive standards focused
specifically on the security of aircraft repair stations. Through these
visits, we established a dialogue on international security
requirements and developed a wealth of information about security
strategies that was useful in developing TSA's Aircraft Repair Station
Security Notice of Proposed Rulemaking (NPRM).
The Implementing Recommendations of the 9/11 Commission Act of 2007
(9/11 Act), Pub. L. 110-53, requires TSA to complete audits of foreign
repair stations within 6 months of issuance of the final repair station
rule. TSA is prepared to swiftly perform these audits upon finalization
of the rule. We have developed a comprehensive database with detailed
repair station information that will help serve as an inspection
scheduling and tracking tool. We have an implementation plan for
completing all foreign repair station audits as required within the 6-
month timeframe.
Throughout development of the Aircraft Repair Station Security
NPRM, TSA has adhered to the principles that the agency should: (1)
Listen carefully to the diversity of interests concerning the rule, (2)
ensure that the rule's proposed standards are risk-based, (3) provide
appropriate flexibility to accommodate the range of repair station
characteristics, and (4) complement FAA's safety regime.
TSA anticipates its aircraft repair station rule will provide an
additional layer of security in the aviation domain. First, TSA will be
in a position to ensure that repair stations across the board carry out
a security program that clearly defines access controls for the
facility as well as aircraft and components, lays out measures to
identify employees and others with access, successfully restricts
access by unauthorized individuals, provides security awareness
training to all repair station employees, conducts employee background
checks, and designates an appropriate security coordinator.
Second, TSA will have inspection authority to examine repair
station property, facilities, and records in order to assess security
and enforce security regulations. Consistent with Vision 100, TSA would
notify repair stations and the FAA if there are deficiencies in
security programs and provide 90 days for the repair station to correct
the deficiencies. If they are not corrected within 90 days, TSA would
notify the FAA that it must suspend the station's certificate until the
deficiencies are resolved. Importantly, a process would be provided to
allow repair stations to request further review of the deficiency
determination. In addition, the rule addresses the process for revoking
the certification of a repair station that is determined to pose an
immediate risk to security as identified on a case-by-case basis, as
well as the opportunity to appeal such a determination.
In closing, TSA strongly encourages all interested parties and
stakeholders to review the proposed rule when published and welcomes
public comment. Upon finalization of the rule, TSA will have the
trained inspectors, logistical information, and plans to quickly follow
through with the audits of foreign repair stations within 6 months as
required by the 9/11 Act.
Thank you for the opportunity to discuss our plans for ensuring the
security of repair stations and our proposed regulations. I would be
pleased to respond to your questions.

Ms. Jackson Lee. Let me thank you very much for your
testimony, and we will proceed with questions. I do want to
acknowledge the presence of Ms. Titus of Nevada and thank her
for being here. I thank the witnesses for their testimony, and
I will remind each Member that he or she will have 5 minutes to
question the panel. I will now recognize myself for questions.
Mr. Scovel, let me begin by framing the understanding or my
understanding of this issue so that it is very clear. First of
all, one report was issued in 2003 and one report was issued in
2008. Congress acted in between but to this new administration
this is an issue that has been on-going. It certainly raises a
lot of questions because of the climate in which we live in 9/
11.
The second premise or given that I would like to suggest is
it would be untenable for any of us to think that airlines
would not be dutiful and attentive to the issue of the repair
status of their aircraft. It is the basis of their work
product. It is the source of their income, and I would expect
that they would be as dutiful as an industry could be expected.
I will hear from their representative on the second panel,
and I would imagine that there is a need for all of us to
improve whatever we might do. But we have a higher
responsibility here in Government, and that responsibility is
to set the framework of security in this post-9/11 era.
So if you would give me an assessment of the
conflictedness, as I perceive it, between the working
relationship between TSA and FAA, tell me what the gaping holes
are. In your report, although it has been submitted into the
record, articulate what you saw that gave rise to, and what the
inspector general's office saw, that gave rise to these
indicting reports?
Mr. Scovel. Thank you, Madame Chairwoman. If I may, I would
like to begin by clarifying, I hope, my role in this. As this
committee well knows, TSA up until 2003 belonged to the
Department of Transportation. It was my predecessor's
responsibility while TSA belonged to DOT to conduct both an
audit with regard to safety oversight by FAA of repair
stations, as well as security measures that TSA was taking
while it belonged to DOT.
The 2003 report that you referred to, Madame Chairwoman,
was issued literally on the eve of TSA's departure from my
department and its move to the Department of Homeland Security.
It was originally classified SSI because of the sensitive
security information contained in it. It has been redacted by
TSA itself, redacted copies have been provided to the
committee. We posted it on my Web site just this week, and I
have asked that it be inserted in the record.
As part of that security review, we inspected 12 domestic
repair stations and 10 foreign repair stations. Like TSA, we
tried to analyze the security picture depending on where a
particular repair station was located. Was it on commercial
airport property, general aviation airport property or was it
off airport property completely?
If I could summarize, four repair stations that were
located aboard commercial airports, and this was only 8 percent
of the stations that we had occasion to examine, we found poor
perimeter access controls, such as gaps in fencing, unmanned
entrance points. Photos of those are contained in the report
that has been provided to the committee.
We found ineffective controls for monitoring individual
movement once on airport property, for instance, repair station
vehicles denoted simply with a magnetic placard while driving--
--
Ms. Jackson Lee. Are you on the foreign soil or domestic
soil?
Mr. Scovel. That was at both, ma'am.
Ms. Jackson Lee. All right.
Mr. Scovel. Domestic and foreign. We also found
insufficient procedures to ensure the safety and security of
individuals performing repairs. In other words, lack of
background investigations. Also, within--although it was well
after a year after the September 11 attacks, we found written
security procedures that had not yet been updated.
Ms. Jackson Lee. This was found on foreign soil repair
stations, foreign repair stations?
Mr. Scovel. It was found on both, both domestic and foreign
repair stations.
Ms. Jackson Lee. And the report of 2008?
Mr. Scovel. Our 2008 report focused primarily on FAA safety
oversight of repair stations. Safety, as you pointed out in
your opening statement, ma'am, has an integral link to
security. Any safety vulnerability can be exploited and turned
into a security threat.
What we found primarily in our 2008 report was that FAA,
despite its efforts beginning in 2007 to create a report that
carriers could submit to it, to submit detailed data that would
allow FAA to fulfill its safety responsibilities, those reports
were incomplete and inadequate and what I have characterized as
leaving FAA fundamentally ineffective in its safety oversight
responsibilities.
Ms. Jackson Lee. Since 2003 and when their departure moved
them to DHS, can you just quickly--and I just have another
question before I conclude to the other witnesses--quickly what
have you seen as the oversight relationship that TSA has had
dealing with the security question?
Mr. Scovel. Well, again to clarify, my responsibility has
not been to look at TSA after 2003. However, I can speak to
FAA's----
Ms. Jackson Lee. If you would look at it from that
perspective then, FAA's coordination and their work product
after 2003 on this issue.
Mr. Scovel. Yes. FAA has been collaborating with TSA.
Through the years, and as you pointed out, the current proposed
rule is quite late, but FAA has been working with TSA to
prepare that rule.
I would like to point out that as important as that
proposed rule may be, perhaps just as important and is
contained in our 2003 report as well as in the Vision 100
legislation, is the requirement for TSA and FAA to conduct a
comprehensive security review and audit of all repair stations.
That hasn't been done in the last 5 or 6 years. It won't
get done until after the proposed rule becomes final. TSA and
FAA will have to work carefully on that and to do it
effectively FAA must have a report that will--from carriers--
that will show what type of maintenance, in what volume and
where it is being conducted so that both TSA and FAA can target
its limited inspector resources.
Ms. Jackson Lee. Very quickly, Mr. Dalbey and Ms. Farkus,
how do you plan to work together on the audits and for TSA to
respond to the audits and for FAA to do the audits? How do you
expect to do that? You have a notice of a rulemaking, but what
are you doing now?
Mr. Dalbey.
Mr. Dalbey. Actually, I would like to defer to Ms. Farkus
on this particular question.
Ms. Jackson Lee. Ms. Farkus.
Ms. Farkus. Well, during this time, we have not been
waiting for the rule to become finalized. We have worked with
FAA very closely to gain an understanding of the types of
repair stations that are involved in this industry.
So the time has given us a chance to understand the
industry, to consult with partners via listening sessions and
written comments and also make inroads with the foreign
governments because since we do not have a legislation or a
regulation to allow us to see these foreign repair stations, we
negotiated with our partners and asked as part of our program
that we already have in place where we inspect foreign airports
and foreign air carriers.
So because of the relationships we had with our foreign
partners and with FAA with their relationships, we were able to
go and pay site visits to several of the locations, as well as
corporate headquarters and industry conferences where we could
gain insights and understanding and work forward.
So what our program office has been doing is taking the
information from the FAA's databases to put that into our work
plan so that as we are preparing what our work schedule is for
the rest of the year, we are going to initiate those audits so
that we can then feed that information back through FAA.
Ms. Jackson Lee. Well, let me--I want to yield to Mr.
Olson. I will just end on this comment and come back to you. I
can only hear that as you are speaking, and as I will reach
back to Mr. Dalbey in the second go-around that employees are
still operating in foreign repair stations without the
appropriate background checks.
I have heard nothing on that. Perimeter issues, I have
heard nothing on that. So let me just allow you at another
point as I yield to Mr. Olson for his questioning. Thank you.
Mr. Olson is recognized for 5 minutes.
Mr. Olson. Thank you, Madame Chairwoman. Mr. Dalbey, in
your testimony you indicate that before issue a certificate to
a foreign repair station, the FAA must determine that the
facility meets the same performance criteria as domestic repair
stations. What specific requirements are necessary to issue a
certificate to a foreign station?
What would be the reason not to issue a certificate to a
foreign station? As you mentioned, it seems like there is a 12
to 24 month that foreigns have to get reapplied and re-
approved, but that doesn't apply to the domestic carriers. I
would just like to elaborate on some of those issues, sir.
Mr. Dalbey. Yes, sir. Thank you for the opportunity. The
foreign repair stations and the domestic repair stations are
identical in regards to they must have the same tools,
facilities, equipment, the same kind of recordkeeping system
program.
Our sort of site for certification standards are the same
whether you are looking at a foreign or domestic repair
stations. As far as the type of work being performed, they must
hold adequate facilities, for instance, for a certain type of
or size of aircraft, they must be able to house whatever kind
of equipment they are working on.
Their personnel must be trained. They must have a roster of
supervisory and inspection personnel. Those inspection and
supervisory people must have the same level of knowledge. So
from a performance standpoint, it makes no difference whether
you are on foreign soil or domestic soil as far as the
technical issues and the performance standards that we look at.
Mr. Olson. Well, thank you very much for that answer, sir.
Ms. Farkus, I would like to ask you, in your testimony you
state that, ``TSA's proposed rule on repair station security
will codify the scope of TSA's existing inspection program and
TSA's authority to enter, inspect, and test property,
facilities, and records concerning repair stations.''
Can you tell us how TSA currently conducts inspections of
foreign stations? Can you describe the collaboration between
TSA and FAA on the inspection of foreign repair stations?
Ms. Farkus. Thank you for the opportunity to address that
question. Under the security regulations, as you noted, we
would be emphasizing the access control identification of
employees and ways to develop contingency plans in case there
were an event. What would be done, the name of security
coordinators so we that would have a 24/7 point of contact.
Because we have not had any regulations to have the
authority to go into these stations, we have done this on a
collaborative basis with the foreign government. Because they
are FAA-certificated stations that also gives us an inroad to
be able to talk to them about their structures.
For the foreign repair stations, there are over 700 of them
and over 300 of them are located on an airport, which would
then be subjected to the airport security program and many of
the needs of the perimeter control, the access control
identification badges would be covered under that airport
security program.
So what we have done in conjunction with FAA is to look at
a risk-based approach and tier the highest threat areas, those
stations that based on a known threat in the region or the
country, based on using current intelligence information that
tells us that there are bad things happening within an area.
The type of work that is being done at the repair station
because what we learned was you may have a three-person shop
that does one small type of repair, if it is just seat cushions
or to a small component of the aircraft.
But you may have a big station where there are thousands of
employees that are working on engines and are working airframes
and there are the ones where we feel that they are more of a
threat, the proximity to the airport. So it is an evolving
process, it is constantly changing based on the intel threat
that is out there and based on the changing nature of the
information that we receive.
Mr. Olson. Thank you very much for that answer.
Mr. Dalbey, we have got one more for you. How do the safety
inspectors decide which stations, which foreign stations to
visit?
Mr. Dalbey. That is a very good question, sir. Not too long
ago we kind of went based on just raw numbers. In other words,
we had so many requirements to go out and do so many
observations. We have a requirement to do at least one repair
station visit per year regardless of whether you are foreign or
domestic.
The past few years we have developed a risk-based system
that basically categorizes based on several technical
indicators of what kind of raw data we are seeing. It is called
the Repair Station Assessment Tool. Those numbers are plugged
into that tool and it tells the inspectors and the applicable
regions which repair stations need more than one visit per year
for instance.
We have also enhanced a tool that we have had around for a
long time, the Safety Performance Analysis System, which we
call SPAS. That is data that all inspectors--that is a tool
that all inspectors feed data into and it also has a lot of
risk indicators that come up.
It is really the way that a repair station inspector for
instance that is assigned to repair stations solely in
Singapore puts in data and every Airline Certificate Management
Office, the FAA inspectors assigned to that are able to go in
there and look at that kind of data to determine their risk.
We really look at the two layers up-front as there is
always a set of inspectors assigned to the repair station and
there is another separate, dedicated group of inspectors that
are assigned to the airline fleet that monitor the maintenance
from that angle. So they determine hand-in-hand which ones need
to be visited first through a very formal risk assessment
process.
Mr. Olson. It sounds like every one of them gets at least
one visit a year and some of them based on a threat get more
visits, you know, up to--what is kind of the high end? I mean,
who gets five, six, seven, eight per year or?
Mr. Dalbey. There are several that probably get four, five,
six. We do some teamed inspections. For instance if you have
three different airlines that are going into a large repair
station someplace you many times have inspectors from all three
of those airlines' FAA teams that will go at one time in
conjunction with the repair station inspector that is assigned
that duty from an FAA standpoint and they will do teamed visit.
Another factor may be if you have an airline that operates
four, five different fleets, if they are putting different
seats of aircraft into a repair station, the person responsible
from the FAA on that fleet will make that trip on his fleet and
he may be followed the next week by somebody who is responsible
for the other fleet for instance.
So there is not a typical average, it really depends on the
size of the repair station, the complexity of the repair
station, the different type of work being performed, the
numbers of fleets that go into that and also the risk
assessment.
Mr. Olson. Well, thank you very much for that answer.
Madame Chairwoman, I yield back my time.
Ms. Jackson Lee. Ms. Titus is recognized for 5 minutes, the
gentlelady from Nevada.
Ms. Titus. Thank you, Madame Chairwoman.
As you may know, I represent southern Nevada, Las Vegas,
and in my district tourism is the most important driver of the
economy. So every day we are proud to welcome visitors from all
around the world, we want them to come to Las Vegas and
experience what all we have to offer.
Because they are coming from all around the world, I am
more interested in your relations with foreign governments. You
mentioned, I think you said we are making inroads with foreign
governments.
But I wonder if Ms. Farkus, if you would elaborate how you
plan to work with foreign governments once the rule is
implemented. How the process will change after the rule is and
give us some assurance this is going to be kind of a mutual
relationship going forward that will be successful?
Ms. Farkus. Thank you very much. TSA currently has TSA
representatives, international industry representatives and
transportation security specialists deployed around the globe.
It is about 22 TSA representatives, about seven international
industry representatives working with the airlines and with
industry associations that are internationally based.
Then the transportation security specialists are those who
then inspect airports, air carriers, and will also be
conducting the foreign repair station, so many of the
relationships with the governments are developed between the
government entities and the airport authorities in the civil
aviation side and then the airline side. In some cases it will
be a new person that we will dealing with as far as the foreign
repair station is concerned because every country is kind of
constructed a little different.
In some cases, it may be part of the airport authority, the
civil aviation factor and other--it may require us to build a
relationship with another department within that government. We
will work with State Department and with the embassy contacts
to make those in-roads.
As we have been doing that already over the--as the rule
has been through the system, we have prioritized that approach,
so it is based on that success we have had with our past
foreign relationships with our representatives around the globe
that we are just building another process in place.
So we have a way that we have been able to develop these
processes, harmonize efforts that way we have worked across
with our European partners in particular. We have worked to
kind of standardize things the way we operate so that we don't
have to inspect as many times there because we are confident of
the measures that they have put in place because of the
information sharing that is done.
That allows us to take those resources and then place them
in areas where it is a higher risk or that we are doing
something new like the foreign repair stations that gives us a
chance to balance our resources and address the threats as they
are developing around the world.
Ms. Titus. Thank you.
I would also just ask you, Mr. Dalbey, it took you 7 years
to come up with this rule. I believe it was 7 years, and I
understand there is a lot of frustration among many of the
stakeholders, many of the people affected, many of the people
who want to have a voice in this rulemaking process. Can you
assure us going forward as this rule is considered and put into
place that there will be more opportunity for that kind of
input?
Mr. Dalbey. Ma'am, are you referring to the TSA notice of
proposal?
Ms. Titus. Right, exactly.
Mr. Dalbey. I really can't address the TSA's rule, madame.
Ms. Titus. I am sorry. Well, maybe I should ask Ms. Farkus
then.
Ms. Farkus. You have our commitment that we will continue
the outreach and expand efforts particularly now that the
notice is out for comment. We are eager to work with others. We
learned a lot through the time that this was being developed.
We didn't just wait. We knew we had work to do. We were
responding as was mentioned earlier. There were so many threats
that kept kind of rising up that we had to put our resources to
other things. But because we have placed those additional
layers of security in place in other areas, we are now able to
focus more fully on the foreign repair station. We look forward
to the comments that we receive, and we will learn from
industry and stakeholders in making this rule flexible and
viable for all.
Ms. Titus. Okay.
Thanks, Madame Chairwoman.
Ms. Jackson Lee. Thank you. Let me raise this point in
conclusion, if I may, and refer to the opening statements that
you made and my opening statement that I am really concerned
about the coordination between TSA and FAA in establishing an
effective security oversight program.
In particular in the case of TSA, identifying incorrect or
security discrepancies which is what my last final questionings
was about, or worse, identifying the security problems that are
of an immediate danger. The rule states that TSA will
communicate in writing to FAA, which will then suspend or
revoke the certification depending on the circumstances.
I need to know that this interagency process will work
quickly and without fail. I don't want a letter sitting on
someone's inbox for 2 weeks before action is taken. So this is
a question for Mr. Dalbey and Ms. Farkus.
Mr. Dalbey will start first. Please tell me how this
notification will occur, at what levels in the two agencies and
if there is an interagency memorandum of understanding that
will be required?
Mr. Dalbey. Madame Chairwoman, as of right now there is no
memorandum that exists but I can assure the FAA is very well
practiced in issuing letters of suspension, letters of
revocation. We will work closely with TSA to establish a
process so there are no questions.
We look at these types of actions as an emergency type of
situation, and we need to go beyond the fact that it goes to
somebody's inbox. I would say a very streamlined set of
processes that when something of this nature occurs, we get
people, a crisis team together and do that very quickly. We are
very willing to work with TSA on having a very fast-tracked
process for that.
Ms. Jackson Lee. So you don't have a protocol for that
right now?
Mr. Dalbey. No, Madame Chairwoman.
Ms. Jackson Lee. Do I understand that the foreign repair
stations have doubled? Is that accurate, over the last--we were
at 300, and we are at 700, is that right, Ms. Farkus?
Ms. Farkus. The current number is a little over 700.
Ms. Jackson Lee. What percentage of that as you indicated
on the--contained in large airport facilities?
Ms. Farkus. Three hundred.
Ms. Jackson Lee. Where are the others located?
Ms. Farkus. Some are located in industrial parks in nearby
areas but I would have to get more details on----
Ms. Jackson Lee. So they are off-site.
Ms. Farkus. They are off-site.
Ms. Jackson Lee. Do your inspectors or have your inspectors
in this coordination before the rulemaking have made trips to
those off-site facilities?
Ms. Farkus. We have made trips to some off-site facilities.
Ms. Jackson Lee. What is the difficulty for getting to
them?
Ms. Farkus. It depends on the country and the situation and
the way the government is constructed in the country. I could
give you some more specifics of particular regions if you would
like.
Ms. Jackson Lee. I would like that for the committee,
please. The nexus that you use to inspect is where domestic
airlines, U.S.-based airlines travel or utilize those
facilities and or foreign airlines that fly to the United
States? Is that how you make the assessment?
Ms. Farkus. Any airport that is the last point of departure
to the United States, we have the authority to----
Ms. Jackson Lee. But on the foreign repair stations that
are off-site, industrial buildings how do you assess inspecting
them?
Ms. Farkus. Until we get the rule in place, we really had
no authority. It was done on a basis of----
Ms. Jackson Lee. But you use as a criteria that those
planes will be flying into the United States or flying
anywhere?
Ms. Farkus. That would be for the United States.
Ms. Jackson Lee. Right.
Ms. Farkus. So it would be--yes.
Ms. Jackson Lee. So if they are off-site, your criteria
would be that they are repairing flights coming in to the
United States----
Ms. Farkus. Yes, ma'am.
Ms. Jackson Lee [continuing]. Whether they be a domestic-
based airline or foreign-based airline.
Ms. Farkus. Yes, ma'am.
Ms. Jackson Lee. Well, let me ask Mr.--let me let you
comment on the question that I just raised about coordination,
sitting on the desk because, again, I go back to the point that
as we speak there are probably security breaches in terms of
background checks and a number of others, and I would raise
that as a concern.
How would you address the communication, that TSA will
communicate in writing and will then work with them--to FAA,
excuse me, and how you will work with them and how
communications will not languish?
Ms. Farkus. We currently have a process that is in place
for the notification when an airport does not meet security
requirements. Our intention is to use that program to model how
we would identify when a foreign repair station is not meeting
the security standards.
That is a process that I am committed to making sure that
it moves through the system and doesn't languish. That we do
everything we can to ensure that our organizations are working
together. I have my administrator's commitment to facilitate
that process as well.
Ms. Jackson Lee. We do recognize, again, the role that each
of you are playing in terms of working with departments of
which you are still resourcing or structuring. I appreciate
that. But I would like to know whether or not you expect that
TSA will seek to increase its budget, which I would make the
request for these inspections?
Ms. Farkus. At this point we have worked within our budget
and expect to work in our budget to address the threats and
look at the risk-based model to then put the resources that we
available to us to those highest threat areas.
Ms. Jackson Lee. So would you recognize the fact that there
is a sense of urgency and that you may need to increase the
budget and increase the numbers of inspectors so to increase
the number of inspections because you are talking about 700
potential sites?
Ms. Farkus. We are already training more inspectors that
are domestically based so that we can then use them in
international inspections. It is also part of their career
development because this way when someone is a domestic
inspector, they also get trained to do international work. It
is a step up for them and an increase in their
responsibilities.
Continuing classes are on-going, so we will have several--
there are over 600 inspectors that are domestically-based so we
can then use that to pool. So until we exhaust that resource,
until we look at the actual model of how many times we can send
somebody out, we are going to work within our existing
President's program.
Ms. Jackson Lee. This committee would like to have a report
as you move forward in the rulemaking on your assessment of the
utilization of the 600 inspectors and the need to increase the
numbers as I, frankly, believe they may be overloaded.
Inspections are required more than once and that means there
will have to repeat visits and assessments and certification.
Let me quickly just address these points to you, Mr. Dalbey
and thank you. The report in 2008 said this, and I think I will
do it in a way that you will be able to just comment on it.
Specifically the report from the inspector general said,
``The FAA did not have an adequate system for determining how
much and where the most critical maintenance occurs, did not
have a specific policy governing when CMO inspectors should
visit repair stations performing substantial maintenance.''
``Did not require inspectors to validate that repair
stations have corrected deficiencies identified in air carrier
audits,'' which I think is one of the more indicting
indictments. ``Four, did not have adequate controls to ensure
that inspector document inspection findings in the national
database and review related findings by other inspectors.''
``As a result FAA could not effectively target its
inspection resources to those repair stations providing the
highest volume of repairs, which caused deficiencies at repair
stations to go undetected or reoccur and prevent inspectors
from obtaining sufficient data to perform comprehensive risk
assessments.''
That could be in safety but it is certainly life or death
in security. I might say safety as well, but our jurisdiction
here is security. What have you done or do you intend to do or
have you done on these issues?
Mr. Dalbey. Thank you, Madame Chairwoman. First of all, we
take the recommendations from the inspector general's office
very seriously. We do appreciate their level of insight, and we
go through these very succinctly and in the case of the 2008
report, we agreed with every recommendation that the IG made.
We have been doing a lot of work towards correcting those
problems. We have recently drafted and are very close to
publishing some internal FAA guidance to our inspectors that
really showcases every one of those issues and makes it
mandatory, for instance, on when a CMO Inspector, which is one
who is assigned to an airline, has to go out and look at a
repair station that we have identified as an essential
maintenance provider, which was another thing in the IG's
report that we could not figure out who was doing what type of
work.
By us classifying certain very high-risk work as essential
maintenance, that is probably the biggest step we have taken to
get in line with the recommendations. We have also in addition
to the guidance that we are getting ready to give to our
inspectors, are issuing two advisory circulars.
Advisory circulars are documents that are information to
inspectors as well as operators, which means they apply to
repair stations and the air carriers. In those documents, we
will outline very specifically how an air carrier has to list
the essential maintenance providers in what part of their
manual.
We do that through a legal document called the ``Air
Carriers Operation Specifications.'' We are very close to
having all of those published, out on the street and have our
inspectors, which is equally as important, trained on how to
interpret and how to apply the policy that are in those
documents.
So we very much appreciate the comments and the
recommendations from the inspector general. We have had a long-
standing dialogue with his office and the lead auditors. They
have helped us along the path.
We have had some bumps along the road where our first
attempts at some of these did not work. We listened to the
inspectors. We listened to the IG and came back and this is our
course of action, and we really think it is going to close out
every one of his recommendations in a very positive light.
Ms. Jackson Lee. Mr. Olson, did you have anything
concluding on this panel?
Mr. Olson. Madame Chairwoman, thank you very much. I do
note that we have a vote going on down there on the floor, and
so I will be very brief. I just want to ask Ms. Farkus one more
question because I know you feel neglected today. We haven't
really talked to you very much.
But in your testimony you stated ``TSA found that foreign
repair stations take security seriously and voluntarily perform
security measures that are consistent with the standards that
TSA is proposing.'' So I just wanted to ask you, based on your
inspections and site visits, can you tell us if the security
standards vary from country to country and/or region to region?
Ms. Farkus. Thank you very much. Yes. What we did learn
though that they do take security seriously. It is a part of
their business. It is ingrained in that because if they don't
maintain security at their stations, they are not going to get
the business and they are not going to stay in operation.
It does vary by region. It does vary by country. We have
not visited all of them yet but those that we have, we learned
some best practices from them and that was one of the good
results that we had out of these outreach visits was to create
a list of best practices and procedures.
What we found from many of the places where they were very
interested and if there was something they could do better. So
it is a wide range of issues, it is a wide range of
characteristics, and we are looking forward to working with the
partners to improve it across the board.
Mr. Olson. Thank you very much for that answer, ma'am.
Then thank all of you for testifying today; greatly
appreciate your time and expertise.
Ms. Jackson Lee. Thank you very much, Mr. Olson. Let me
just finish--thank you, Mr. Olson----
Mr. Olson. Thank you, Madame Chairwoman.
Ms. Jackson Lee [continuing]. With this question. Mr.
Scovel, do you think at this point with the 700 foreign repair
stations that we are at a point where we know the background of
all of the employees that may be utilized in this important
task that these airlines have responsibility for and the
Government has responsibility for?
Mr. Scovel. Madame Chairwoman, I am certain we don't know
that. In connection with our 2008 safety oversight report, we
visited foreign repair stations. We know that background
investigations are not being conducted on all employees at
those locations.
Ms. Jackson Lee. Do you sense a sense of urgency, Mr.
Scovel?
Mr. Scovel. Yes, absolutely. I understand TSA's resource
restraints, the need to prioritize in terms of threat. Clearly
though, as this committee and America knows, we remain a Nation
at war. Our enemy is implacable.
They have demonstrated the intent and capability to target
U.S. civil aviation repair stations. As we noted in our 2003
report based on an incident in Singapore in late 2001, repair
stations are on their target list. We have to assume that,
Madame Chairwoman.
Ms. Jackson Lee. So quickly, if you had one task coming
from your reports collectively, 2003, 2008 as an IG,
recognizing the firewalls that you exist in but the committee
is asking, what would you say the first charge will be? Now, we
know we have a rulemaking going on, but what would be the first
charge or an important list of charges to get started between
FAA and TSA?
Mr. Scovel. Ma'am, first item on the to-do list remains to
FAA to structure a report from the carriers so that critical
maintenance and the volume of it and the specific locations can
be identified both so that FAA can satisfy its safety
responsibilities and so that TSA can target its scarce
inspector resources, which are quite limited right now, to
those locations that need the most attention.
Ms. Jackson Lee. So getting a report from our airline
friends to FAA, the one that FAA secures, that establishes
where these stations are so that a prioritization could be
begin or it could go on. Then we would be able to use scarce
resources and build a database to possibly ask for more
resources for doing this important work. Is that my
understanding?
Mr. Scovel. That is correct, ma'am, thank you.
Ms. Jackson Lee. Mr. Dalbey, do you have a sense of
urgency?
Mr. Dalbey. Madame Chairwoman, I would defer as far as the
security question to the TSA. But I would like to comment that
we have helped them in the past by providing our databases with
them, and we will continue to do so.
Ms. Jackson Lee. But do you have a sense of urgency on this
matter?
Mr. Dalbey. Yes, ma'am. As I----
Ms. Jackson Lee. Is that the sense that--is that FAA--do
you think that is a sense of--that they have established that
this is important?
Mr. Dalbey. Absolutely, Madame Chairwoman.
Ms. Jackson Lee. So can you secure the document that the
inspector general is asking, which I think is common sense in
your partnership with TSA is to secure from the airlines a
report on the existence of the foreign repair stations so that
an analysis of resources could be named?
Mr. Dalbey. We will actually have most of that I believe
when we have the essential maintenance providers that is
mandated through their operations specifications under
maintenance----
Ms. Jackson Lee. What time frame is that?
Mr. Dalbey. I believe probably early next year we will
have----
Ms. Jackson Lee. Well, this committee is going to ask for
you to report back on whether or not you could accelerate that
time frame in light of the work that we expect TSA to do.
Mr. Dalbey. Yes, ma'am, I will----
Ms. Jackson Lee. Could you please provide us with that
report?
Mr. Dalbey. Yes, ma'am.
Ms. Jackson Lee. Ms. Farkus, do you have a sense of
urgency?
Ms. Farkus. Yes, ma'am I do. This is one of our highest
priorities to work through the rulemaking process and then
implement. As I said, we had been conducting the outreach
services, and we have those continued to plan through the
months until the rule is final.
I currently have a team in Switzerland looking at the
stations there, and I have a team going to Mexico in December
to look at some foreign repair stations there. So we will----
Ms. Jackson Lee. You understand, however, that we, as we
speak, have stations notwithstanding the good work of our
airlines that are without inspection. You understand that?
Ms. Farkus. Yes, ma'am.
Ms. Jackson Lee. And that there are individuals working
without background checks?
Ms. Farkus. Yes, ma'am.
Ms. Jackson Lee. What I would like for you to do as you do
this rulemaking, which has a legal time frame, is I would like
TSA to provide this committee with a report back on the
potential increased number of inspectors and/or inspections and
what approach TSA is going to take to assess that need.
Ms. Farkus. Yes, ma'am.
Ms. Jackson Lee. Let me thank all of you for your very
thoughtful testimony and instructive testimony. This panel will
be excused, and I look forward to your submissions in writing.
Thank you so very much. We will start with the second panel
after the votes. This committee is now in recess. Thank you.
[Recess.]
Ms. Jackson Lee. Call the hearing back to order and thank
the witnesses for their patience. I welcome our second panel of
witnesses. Our first witness is Mr. Robert Roach, general vice
president of Transportation at the International Association of
Machinists and Aerospace Workers. IAM represents 6,000
machinists with several U.S. carriers.
Our second witness is Mr. Robert Gless, assistant director
at the Transport Workers Union of America. TWU represents 6,500
American Airlines mechanics. That airline is the only air
carrier that does not outsource aircraft maintenance to foreign
repair stations.
Our third witness is Mr. Chris Moore, chairman of the
Teamsters Aircraft Mechanics Coalition. The Teamsters represent
18,500 aircraft mechanics with 10 airlines.
Our fourth witness is Mr. Basil Barimo, Barimo, excuse me.
Mr. Barimo is vice president at the Air Transport Association
of America. Mr. Barimo leads ATA's Operations and Safety
Division.
Our fifth witness is Mr. Christian Klein. He is the
executive vice president, the Aeronautical Repair Station
Association. He oversees its communications and industry
outreach activities.
Without objection, the witness' full statements will be
inserted in the record, and I will now ask each witness to
summarize his statement for 5 minutes. Let me also thank each
of you for the time you have taken to come.
Your input is a particularly important and strategic part
of how we review the security risks and safety concerns of
foreign repair stations.
So again, we thank you, and we will begin with Mr. Roach,
who is now recognized for 5 minutes.

STATEMENT OF ROBERT ROACH, JR., GENERAL VICE PRESIDENT OF
TRANSPORTATION, INTERNATIONAL ASSOCIATION OF MACHINISTS &
AEROSPACE WORKERS

Mr. Roach. Thank you, Chairwoman Jackson Lee, and Members
of the committee for the opportunity to speak to you today. My
name is Robert Roach, Jr., General Vice President of
Transportation for the Machinists Union.
I am appearing at the request of International President R.
Thomas Buffenbarger. The Machinists Union is the largest
aviation union in North America, representing 180,000 airline
and aerospace workers in almost every classification, including
mechanics, flight attendants, ramp service workers, passenger
service employees, and production workers.
I would like to say on behalf of the 25,000 members that we
have in Texas, thank you for calling this hearing and
especially our Continental flight attendants which are based in
Houston, Texas.
Each year, U.S. airlines increase their use of overseas
aircraft repair facilities. I don't know of anyone who has ever
said that maintenance is outsourced to overseas facilities to
improve safety.
The first step in securing an aircraft is restricting the
people who have access to it. Criminal background checks in the
United States. None are required in the overseas repair
stations. An al Qaeda member was employed at the Singapore
repair station that performed maintenance on U.S. aircraft at
the time he was arrested in 2001.
Pre-employment and on-going random drug and alcohol testing
is another employment requirement for U.S. aircraft
technicians. It makes no sense that the FAA does not require
the same people working at overseas repair stations.
Aircraft maintenance manuals, which technicians are
required to have with them when making repairs are printed in
English. The personnel at overseas repair stations are not
required to read English, creating a major safety problem.
IAM members regularly report aircraft returning from heavy
maintenance performed overseas with dangerous malfunctions.
Recent reports including mis-wired engine indicators, critical
sensors covered up, and parts installed backwards.
I would like to say at this point that many of the aircraft
was indicated earlier that these, there were checks on these
aircraft before they are put back in service, and I will say
that I have an expert with me, Dave Supplee, from US Airways
that can indicate that these planes are in service when many of
these things are detected by our mechanics after they are back
in service.
There is a danger of bogus parts making their way on to the
U.S. aircraft without proper oversight. There is no uniform
facility security requirements. There is a potential for
sabotage, the smuggling of weapons on-board aircraft without
proper security practices.
FAA inspectors do not inspect foreign repair stations on a
regular basis. When they do, they must announce their
inspections in advance. In the United States, surprise
inspections are allowed. Non-certified FAA stations are
utilized by many airlines but the FAA has no oversight and does
not monitor these stations at all.
U.S. airlines have increased their outsourced maintenance
from 29 percent in 2000 to 45 percent today, with much of it
going overseas. But FAA oversight has not kept pace
jeopardizing our aviation system.
There was indication about loss of employment, one facility
in Indianapolis was the most modern facility in the world and
that is now operating at 25 percent because United Airlines
chose to take their work out of that location and farm that
work out, to subcontract that work, much of it going overseas.
Since 9/11, we have tightened up the physical security at
U.S. airports and require airline employees to pass stringent
background checks but allowing U.S. aircraft to be maintained
in unsecure facilities by unqualified, often unknown personnel
creates a gaping hole in the security of our air transportation
system.
The lowest cost and not the highest safety standards is a
driving force when airlines choose maintenance repair stations.
The Machinists Union believes that there should be only one
level of safety and security, the highest, for the U.S.
aircraft regardless of where they are maintained.
If overseas repair stations and their employees cannot meet
the same requirements as airlines based in the United States,
Congress should mandate this work be performed without our
borders or where there is more FAA regulation oversight.
Thank you again, and we look forward to answering any
questions you may have.
[The statement of Mr. Roach follows:]

Prepared Statement of Robert Roach, Jr.
November 18, 2009

Thank you Chairman Thompson, Subcommittee Chairwoman Jackson Lee,
and Members of this committee for the opportunity to speak to you
today. My name is Robert Roach, Jr., General Vice President of
Transportation for the International Association of Machinists and
Aerospace Workers (IAM). I am appearing at the request of International
President R. Thomas Buffenbarger. The Machinists Union is the largest
aviation union in North America, representing 180,000 airline and
aerospace workers in almost every classification, including mechanics,
fight attendants, ramp service workers, passenger service employees and
production workers.
Each year U.S. airlines increase their use of overseas aircraft
repair facilities. As a result, major airlines have closed U.S.
maintenance bases leaving thousands of people out of work, and in the
case of United Airlines closing its Indianapolis maintenance facility,
taxpayers on the hook for the construction bill.
I don't know of anyone who has ever said that maintenance is
outsourced to overseas facilities to improve safety. The true reason is
undeniable--airlines send maintenance work overseas because they can
get the minimum maintenance performed for the least amount of money.
Although an airline may experience immediate cost savings from sending
maintenance work overseas, the long-term cost to our Nation can be
devastating. There has never been room for error in the aviation
industry.
I have been asked to discuss the security aspect of overseas
maintenance operations, but a discussion of facility security must
include their personnel, maintenance track record, and FAA oversight.
The first step in securing an aircraft is restricting the people
who have access to it. Technicians working at U.S.-based aircraft
maintenance facilities are required to undergo FBI criminal background
checks. In fact, technicians with a criminal infraction that is in no
way indicative to being a potential security risk can be rejected for
an airport security pass, thereby denying them employment.
However, neither the FAA nor the airlines require people working at
overseas facilities to undergo criminal background checks. No security
clearance is required. U.S. airlines contract with overseas facilities
that do not vet their employees, yet allows them unfettered access to
the most critical parts of an aircraft.
There is no way for the FAA or individual airlines to know if the
person performing critical safety maintenance on U.S. aircraft at
overseas facilities are qualified technicians or al Qaeda operatives.
This is not as far-fetched as it sounds, as an al Qaeda member was
employed at a Singapore repair station that performed maintenance in
U.S. aircraft at the time he was arrested in 2001. In the United
States, passengers go through more stringent security checks than the
people overseas repair stations hire to maintain our aircraft.
Pre-employment and on-going random drug and alcohol testing is
another employment requirement for U.S. aircraft technicians. The
reason behind this is clear--we don't want impaired people maintaining
our aircraft. It makes no sense that the FAA does not require the same
of people working at overseas repair stations.
English is the language of aviation. Pilots and air traffic
controllers at all major international airports are required to speak
English for safety reasons. Aircraft maintenance manuals, which
technicians are required to have with them when making repairs, are
printed in English. But personnel at overseas repair stations are not
required to read English, creating a major safety problem. Imagine how
difficult it is repair a machine as complex as a modern jet aircraft
with instructions written in a language you do not understand.
IAM members regularly report aircraft returning from heavy
maintenance performed overseas return with dangerous malfunctions.
Recently, US Airways aircraft 444, a 737-400, had heavy maintenance
performed in El Salvador. It returned with its engine indication wires
crossed. This meant that if there was an emergency in the No. 1 engine
there would have been an indication in the cockpit that the problem was
with the No. 2 engine. If the pilots shut down the No. 2 engine
thinking the problem was there, it would have left the aircraft with
only one engine operating--the one with the malfunction. This
potentially catastrophic mistake was corrected by US Airways mechanics
in Tampa on September 30, 2009. Pilots are trained to trust their
instruments. When the instruments lie, the lives of everyone on board
are at risk.
On October 1, 2009, a warning light in the cockpit of US Airways
aircraft number 0316 indicated the forward entry door was open at an
altitude of 1,000 feet. When IAM mechanics investigated they found an
El Salvador repair station left modeling clay covering the door's open/
close sensor target. Another US Airways aircraft recently lost pressure
because the same El Salvador repair station installed a door snubber
backwards. Both aircraft had been deemed airworthy by the repair
stations in El Salvador.
Additionally, if overseas repair stations do not have the same
strict oversight as domestic facilities, we cannot know if the parts
they install are genuine FAA- and manufacturer-approved parts, or
inferior bogus parts. This problem has been growing in recent years.
The system is broken, and we look toward Congress to fix it.
There are no uniform requirements for securing overseas facilities
where U.S. aircraft are maintained. Securing the aircraft means
securing the facility. Access to U.S. aircraft operating areas is
strictly controlled by local, State, and the Federal requirements. But
the measures enacted in the United States to secure our aircraft do not
apply when they are sent overseas. Major maintenance checks performed
overseas sometimes last for weeks, providing ample opportunity for
sabotage or the planting of contraband.
The terrorist bombing of a Pan Am 747 over Scotland was the result
of an altitude-sensitive bomb placed aboard the aircraft on an earlier
leg of the flight. It is not hard to imagine how a similar device can
be hidden on an aircraft that has been stripped for heavy maintenance
in an unsecure facility by unknown personnel.
Additionally, illegal drugs have been smuggled into this country
hidden on-board aircraft bound for the United States. If that can
happen, a bomb or other weapon can similarly be placed on-board an
aircraft for retrieval by accomplices in flight or on the ground.
Airlines can utilize both FAA-certified and non-certified
facilities to perform maintenance. The FAA's oversight of overseas-
certified repair stations is insufficient to ensure compliance with
what limited regulations there are. On-site visits are few and far
between. When an FAA inspector does plan to visit an overseas facility,
the visit is announced months in advance, allowing the facility to
prepare for the inspection. This is in contrast to the unannounced
inspections of U.S. repair stations.
While oversight of FAA-certified stations is inadequate, regulation
of non-certified stations is non-existent. A December 2005 DOT
Inspector General report \1\ found that non-certificated facilities
operate without the same regulatory requirements as certificated repair
stations and operate with no limit on the type or scope of work they
can perform. The report also verified that the FAA does not monitor the
maintenance performed at non-certificated facilities and the air
carriers' training and oversight of these facilities are inadequate.
The report further revealed that the FAA did not know the extent of
maintenance performed at non-certificated repair facilities.
---------------------------------------------------------------------------
\1\ DOT Inspector General Report Air Carriers' Use of Non-
Certificated Repair Facilities, December 15, 2005 (AV-2006-031).
---------------------------------------------------------------------------
U.S. airlines have increased their outsourced maintenance from 29
percent in 2000 to 45 percent today \2\ with much of it going overseas.
But FAA oversight has not kept pace, jeopardizing our aviation system.
---------------------------------------------------------------------------
\2\ Bureau of Transportation Statistics, Change in Passenger
Airline Maintenance Employees Per Aircraft and Percent of Maintenance
Spending Outsourced* 2007-2008, http://www.bts.gov/press_releases/2009/
bts026_09/html/bts026_09.html.
---------------------------------------------------------------------------
CONCLUSION

Since 9/11 we have tightened up the physical security at U.S.
airports and required airline employees to pass stringent background
checks. But allowing U.S. aircraft to be maintained at unsecure
facilities by unqualified, and often unknown, personnel creates a
gaping hole in the security of our air transportation system.
The lowest cost, not the highest safety standards, is the driving
force when airlines choose maintenance repair stations. The Machinists
Union believes there should be only one level of safety and security--
the highest--for U.S. aircraft, regardless of where they are
maintained.
Having strict requirements for U.S. operations is meaningless if
they can be avoided by an airline flying their planes to another
country with lesser requirements and little or no FAA oversight. Less
oversight means less money. If overseas repair stations and their
employees cannot meet the same requirements as the airlines' U.S.-based
operations, Congress should mandate that work be performed within our
borders where there is more FAA regulation and oversight.
Thank you. I look forward to your questions.

Ms. Jackson Lee. Thank you very much, Mr. Roach, for your
testimony.
Mr. Gless, you are now recognized for 5 minutes.

STATEMENT OF ROBERT GLESS, ASSISTANT DIRECTOR OF THE TRANSPORT
WORKERS UNION OF AMERICA, AIR TRANSPORT DIVISION

Mr. Gless. Thank you. There we go. The Transport Workers
Union of America, members of the AFL-CIO, on behalf of our
200,000 active and retired members in the transportation
industry including aircraft mechanics at American Airlines and
American Eagle--roughly about 15,000--appreciate the
opportunity to appear before the committee.
Now, today I would like to speak on the issue of aircraft
maintenance and the need to strengthen security to help ensure
safety at overseas aircraft repair stations. There are three
major concerns that we have with regard to repair work
performed at foreign aircraft repair stations.
First, we have long held that our belief is that the same
standards should be applied to repair work being performed on
U.S.-bound aircraft regardless of work being done in the United
States or abroad.
Second, the loss of thousands of American jobs to
outsourced foreign repair mechanics further weakens our U.S.
economic security and finally, we have a concern regarding
security breaches within and around the perimeters of
facilities which can lead to sabotage.
Thus we have four recommendations regarding aircraft
maintenance that we see as necessary to ensure safe and secure
air travel for the American public. No. 1, require that all
maintenance on aircraft used in domestic United States service
be done in FAA-certified repair facilities.
No. 2, require as a condition of the FAA certification that
all repair stations meet the same standards. That would
include, not limited to, the drug and alcohol testing and the
Part 65 Mechanic Certification.
No. 3, reconfigure the FAA inspection and oversight to
place a greater scrutiny on those repair stations whose order
to terminate pose the greatest risk to safety and security.
No. 4, require as a condition to FAA certification that all
repair stations be subject to unannounced FAA inspections. The
FAA shall be prohibited from certifying and repairing any
repair station in any countries that prohibit unannounced
inspections and shall immediately revoke any existing
certifications in such countries.
Ironically, in-house work performed by the carriers has
received the greatest scrutiny and FAA oversight but it poses
the least risk because of the following factors. The carriers
have shouldered the responsibility to monitor themselves and
are mindful of the in-house regulations that they are required
to meet.
In addition, the FAA regulations hold the domestic station
aircraft mechanics to a high standard including having all
aircraft mechanics being subject to the drug and alcohol
testing, to pass the criminal background checks and undergo the
unannounced inspections by FAA inspectors at any time and at
any place.
Additionally, the mechanics who work on aircraft are
usually certified under Part 65 and those that sign off the
work on the aircraft, this certification is required. If all
the aircraft flown in domestic U.S. service was serviced by the
aircraft mechanics, then our concern of the lack of oversight
would be null.
American Airlines, the prominent carrier of the mechanics
that the TW represents does not outsource their work. Instead,
American has been a trend setter and brought in additional
income by in-sourcing work. Our mechanics employed by American
Airlines are held to a standard unlike workers at overseas
repair stations that have no background checks, are not subject
to alcohol and drug testing, or to the unannounced inspections
by the FAA.
The 2003 Homeland Security mandate that resulted from the
attacks on September 11 set in place that security rules for
foreign and domestic repair stations to ensure they would be
equally applied. Much to our dismay, 6 years later the security
rules still have not been implemented. We feel that this is
simply unacceptable given the security risks at hand.
The suggestion is not that foreign countries must adapt and
change their laws to institute widespread drug and alcohol
testing and criminal background checks. However, to achieve the
highest level of safety and security, we ask the Federal
Government and Congress to require those that work on U.S.
aircraft to meet the same standards that the FAA imposes on the
U.S. domestic stations.
From a security standpoint, it is not hard to imagine how
certified foreign aircraft repair stations could supply
terrorists with an opportunity to sabotage U.S. aircraft that
will eventually re-enter the U.S. air space.
On July 14, 2009, Senator Claire McCaskill issued a press
release stating information that indicates that a 2003 DOT IG
report revealed that the United States has found a member of al
Qaeda working at a foreign aircraft repair station in
Singapore.
This example provides a demonstrated risk to our National
security due to the weakened oversight of foreign aircraft
repair stations. This kind of clear and direct risk of our
National security must be enough to prompt action.
We call on TSA to consult with stakeholders regarding
implementation of a robust and effective security program that
will begin to build the firewall to protect the American flying
public against any future aviation-related attacks.
Such a security program would need to include protocols
dealing with background checks of workers, drug and alcohol
testing, and overall perimeter safety and security measures for
all repair stations working on U.S.-bound aircraft.
The alternative of double standards, strict scrutiny where
already layers of protection are applied versus the lack of
oversight where layers of protection are absent, is merely a
roadmap for disaster and a direct impact to the integrity of
the American worker.
Thank you for this opportunity to testify before you today.
I am available to answer any questions you may pose regarding
my testimony. Thank you.
[The statement of Mr. Gless follows:]

Prepared Statement of Robert Gless
November 18, 2009

The Transport Workers Union of America, AFL-CIO (TWU) on behalf of
its 200,000 active and retired members in the transportation industry,
including airline mechanics at American Airlines and American Eagle,
appreciates the opportunity to appear before this committee.
In particular, I thank the committee for its diligence in passing
H.R. 2200, the Transportation Security Administration Authorization. We
look forward in the second half of this 111th Congress to the
successful passage in the Senate of an FAA Reauthorization Bill that
will end the double standard that is applied to aircraft maintenance at
outsourced stations, as opposed to that performed at the carriers
themselves.
Specifically today I would like to speak on the issue of aircraft
maintenance and the need to strengthen security to help ensure safety
at overseas aircraft repair stations. We represent some 15,000 workers
who fall within this category of interest. Since the number of
maintenance that is done overseas has increased greatly since 2003 we
feel that we should do all that we can to close any security gap.
There are three major concerns that we have with regard to repair
work performed at foreign aircraft repair stations. First, we have long
held that our belief is that the same standards should be applied to
repair work being performed on U.S.-bound aircraft regardless if the
work is done in the United States or abroad. Second, the loss of
thousands of American jobs to outsourced foreign repair mechanics
further weakens our U.S. economic security. And finally, we have a
concern regarding security breaches within and around the perimeters of
facilities which can lead to sabotage. Thus, we have four
recommendations regarding aircraft maintenance that we see as necessary
to ensure safe and secure air travel for the American public:
1. Require that all maintenance on aircraft used in domestic U.S.
service be done in FAA-certified repair facilities.
2. Require, as a condition of Federal Aviation Administration (FAA)
certification, that all repair stations meet the same
standards. This would include, but not be limited to, drug and
alcohol testing and Part 65 aircraft mechanic certification.
3. Reconfigure FAA inspection and oversight to place the greatest
scrutiny on those repair stations whose audits determine to
pose the greatest risk to safety and security.
4. Require, as a condition of FAA certification, that all repair
stations be subject to unannounced FAA inspections. The FAA
shall be prohibited from certifying any repair station in any
countries that prohibit unannounced inspections and shall
immediately revoke any existing certifications in such
countries.
We understand that the committee shares jurisdiction with some of
these issues and that the FAA Reauthorization Bill addresses them as
well.
aircraft used in domestic united states/in-house work
Ironically, in-house work performed by the carriers has received
the greatest scrutiny and FAA oversight, but it poses the least risk
because of the following factors:
1. The carriers have shouldered the responsibility to monitor
themselves and are mindful of the in-house regulations that
they are required to meet.
2. The Federal FAA regulations hold domestic station aircraft
mechanics to a high standard, including having all aircraft
mechanics being subject to random drug and alcohol testing, all
aircraft mechanics passing criminal background checks and all
aircraft mechanics being subject to unannounced inspections by
FAA inspectors at any time and any place.
Additionally, mechanics who work on aircraft are usually certified
under Part 65 and for those that sign off on work done on the aircraft,
this certification is required. If all of the aircraft flown in U.S.
domestic service was ``serviced'' by a domestic aircraft mechanic, then
our concern of the lack of oversight would be null.
However, as reported in the FAA's report AV-2008-090, ``Air
Carriers Outsourcing of Aircraft Maintenance'' issued September 30,
2008, out of the nine air carriers that were reviewed (AirTran Airways,
Alaska Airlines, America West Airlines--aka US Air, Continental
Airlines, Delta Air Line, JetBlue Airways, Northwest Airlines,
Southwest Airlines, and United Airlines), 71 percent of their heavy
airframe maintenance check work was outsourced to a foreign repair
station. Since 2003, this trend of sending aircraft maintenance work
out of the in-house domestic stations has more than doubled in
statistical data from 34 percent in 2003 to 71 percent in 2007.
American Airlines, the predominant air carrier of mechanics that
TWU represents, does not outsource their work. Instead, American has
been a trendsetter and brought in additional income by insourcing
maintenance work. Our mechanics employed by American Airlines are held
to a high standard unlike workers at overseas repair stations that have
no background checks, are subject to no alcohol and drug testing and
are not subjected to unannounced inspections by that FAA.

OUTSOURCING OF REPAIR WORK POSES AN ECONOMIC RISK

We believe that there are many issues related to physical security
and National security that relate directly to the outsourcing of
aircraft repair work, but an often ignored aspect is the serious trend
that this kind of outsourcing has created and the results that trend
has had on us all. The United States continues to recover from what
many economists refer to as ``The Great Recession.'' As of October
2009, the Bureau of Labor Statistics reported that the unemployment
rate was 10.2 percent. The United States has lost millions of jobs and
we have seen what effect job losses have on our economic stability and
economic security. Just recently, TWU local 530 learned that several
hundred of its members who perform maintenance work for American
Airlines would be laid off, as the Airline is forced to consolidate and
downsize its fleet. This kind of job loss, whether as a result of our
current economic condition or the increasingly common practice of
outsourcing repair work, has the potential to extend this period of
economic weakness for the United States.

FOREIGN AIRCRAFT REPAIR STATIONS

Irresponsible regulatory changes in 1988 have allowed the FAA to
certify foreign aircraft repair stations to work on U.S. aircraft not
engaged in international travel and to do so under different standards
than that applied to domestic stations. The concerns stemming from the
aftermath of September 11, 2001, with the safety and security of U.S.-
flagged aircraft, demands that we take seriously the lack of oversight
of aircraft maintenance being performed outside the reach of domestic
in-house stations, which is being performed without having the same
rigorous and demanding standards applied.
The 2003 FAA Authorization, pursuant to 2003 homeland security
prescriptions that resulted from the attacks on September 11, 2001, set
in place that security rules for foreign and domestic repair stations
should be changed to ensure that security protocols are applied
equally. Much to our dismay, 6 years later, the security rules still
have not been implemented. As it stands, as of November 16, 2009 the
security rules were finally released. We feel that this is simply
unacceptable given the security risks at hand.

DRUG AND ALCOHOL TESTING STANDARD

Most, except for a handful of foreign aircraft repair stations, do
not require personnel who work on aircraft destined for U.S. domestic
air service to pass a drug and alcohol test. The U.S. Congress has
determined that drug and alcohol impairment is an unacceptable risk for
airline passengers, and has deemed domestic airline mechanics as
``safety-sensitive personnel,'' which requires that they are subject to
robust drug and alcohol testing.
The Supreme Court has since upheld the requirement of drug and
alcohol testing on the grounds of safety for persons deemed ``safety-
sensitive personnel.'' Yet, even though domestic airline mechanics have
been deemed as ``safety-sensitive personnel,'' mechanics at foreign
repair stations continue to evade this label. It is our belief that
those who work on U.S.-bound aircraft, whether in the United States or
abroad, must be deemed ``safety-sensitive personnel.''
Presently, in-house air carrier mechanics are held to the highest
safety standards and receive the majority of FAA inspection oversight.
However, foreign aircraft repair station air carrier mechanics are less
scrutinized, held to a lower standard, and receive almost no FAA
inspection oversight. It is our belief that at least the same safety
guidelines should be followed at foreign aircraft repair stations and
domestic in-house repair stations.
The suggestion is not that foreign countries must adapt and change
their laws to institute wide-spread drug and alcohol testing and
criminal background checks. However, to achieve the highest level of
safety and security, and to ensure that we are meeting the safety
standards that the U.S. flying public believes that they are receiving,
the Federal Government-Congress must require those that work on U.S.
flag-flying aircraft to meet the same safety and security standards
that the FAA imposes on U.S. domestic stations.

CERTIFICATION STANDARD

Obtaining a Part 65 mechanic's license is a time-consuming and
demanding process that ensures the mechanic's level of expertise. The
FAA requires mechanics that perform a number of jobs on U.S. aircraft
at domestic aircraft repair stations to go through it. However, there
is no similar requirement on the mechanics who perform maintenance at
foreign aircraft repair stations and we feel that this is a critical
area of concern. If the FAA feels that American workers at domestic
repair stations must have a Part 65 mechanic's license, then we believe
they must view this certification as necessary to safely do the job and
thus it should be required of all mechanic's working U.S.-bound
aircraft.

SECURITY STANDARD

Since the horrific events of September 11, 2001, layer upon layer
of security has been deemed the norm of protecting our aircraft and
preventing another attack. Additional layers of protections and
restrictions were imposed on domestic aircraft mechanics and other
airline workers. These rules were put into place because policymakers
believed that it was important to maintain security.
Limiting and controlling access areas to aircraft, imposing
criminal background checks, and checking terrorist watch lists are all
rules that were imposed on aircraft mechanics working domestically in
the United States by Congress and the Transportation Security
Administration (TSA). Rules were also issued that would revoke airman
certificates, which include a Part 65 mechanic certification of any
individual determined by the TSA to pose a threat to aviation security.
Yet no entity of the U.S. Government, the FAA, TSA, or any other
agency requires any type of background check for workers at foreign
repair stations who repair or maintain U.S. aircraft. At least at
domestic contract repair stations, Part 65 mechanics are covered by the
TSA/FAA rule. While in theory the TSA/FAA rule applies to Part 65
mechanics located overseas, foreign stations are allowed to work on
U.S. aircraft without having any certified mechanics; as such, from a
practical standpoint, this rule does not apply to foreign stations.
Loose or nonexistent security at foreign aviation facilities
provides a window of opportunity for terrorists with designs on U.S.
air travel. From a security standpoint, it is not hard to imagine how
certified foreign aircraft repair stations, working on U.S. aircraft,
could provide terrorists with an opportunity to sabotage U.S. aircraft
or components that will eventually re-enter the United States. On July
14, 2009, Senator Claire McCaskill issued a press release stating
information that indicates that a 2003 DOT IG report revealed that the
United States had found a member of al Qaeda working at a foreign
aircraft repair station in Singapore. This example provides a
demonstrated risk to our National security due to the weak oversight of
foreign aircraft repair stations. If this kind of clear and direct risk
to our National security is not enough to prompt action, then I'm not
sure what is.
We call on TSA to consult with stakeholders regarding
implementation of a robust and effective security program that will
begin to build the firewall to protect the American flying public
against any future aviation related attacks. Such a security program
would need to include protocols dealing with background checks of
workers, drug and alcohol testing, and overall perimeter safety and
security measures for all repair stations working on U.S.-bound
aircraft.

STANDARD OF OVERSIGHT AND INSPECTION

The standard of scrutiny of oversight and inspection of foreign
repair stations is not only inadequate, it is somewhat non-existent.
A 2003 report by the Department of Transportation Inspector General
found that though foreign repair stations were widely used by U.S.
carriers, some FAA-certified foreign repair stations are not inspected
at all by FAA inspectors because civil aviation authorities review
these facilities on behalf of the FAA. The consequence of such is that
sufficient data to determine what was inspected is lacking.
Foreign repair stations that the FAA inspected fare about the same.
One reason is that the law only requires a recertification inspection
every 2 years. Since 1988, when the rules were loosened, there were
only 200 such stations; as of September 30, 2008, there were 709 such
stations. With this rapidly increasing amount of stations, oversight
has not kept pace with the amount of FAA inspectors needed to inspect
them.
Therefore, whether it is because: (1) Civil aviation authorities
review foreign repair stations instead of FAA inspectors or (2) there
are too many foreign repair stations for the relatively few FAA
International Field Officers to maintain a consistent inspection
standard or (3) that foreign repair stations are not subjected to the
same unannounced visits which ensure around the clock adherence to the
standards. As a result, no true oversight and inspection exists for the
majority of foreign repair stations or mechanics.
The Gap must be closed. The U.S. Government must ``mind the gap''
and close loopholes that continue to jeopardize the safety of those
that depend on the industry. This lack of oversight has consequences.

BACKGROUND ON TWU AND AIRCRAFT MAINTENANCE

In 1989, the TWU testified against the FAA's rule change.
Unfortunately, we were right in predicting that the elimination of
limits on movement of maintenance would result in the outsourcing and
loss of tens of thousands of jobs to overseas facilities. And, we were
also right in predicting that the FAA would not have the capacity to
give proper oversight on the work and that the work and workers who
performed it would not be subject to the same regulatory requirements
the U.S. mechanics function under. We were labeled ``exaggerators.''
The work that TWU managed to secure at American happens not to be
the norm. In ``Air Carriers Outsourcing of Aircraft Maintenance,'' the
FAA report of September 30, 2008, American Airlines, which was the
largest U.S. air carrier, ``was not included in outsourcing data since
it retained its heavy maintenance as opposed to making a significant
shift to outsourcing.'' Thus, it is clear; including American Airlines
in the data would have skewed the results.
The 18 heavy checks performed at American Airlines are all done in-
house at bases in Tulsa, and Alliance Fort Worth, and until recently,
Kansas City. Being the only major carrier that still does the majority
of its own maintenance, at a time when other carriers are outsourcing
their maintenance, has its issues.
The alternative of double standards, strict scrutiny where already
layers of protection are applied vs. the lack of oversight where layers
of protection are absent, is merely a roadmap for disaster. That is
disastrous for the American flying public as well as disastrous for the
integrity of the American worker.
Thank you for the opportunity to testify before you today. I am
available to answer questions that you may pose regarding my testimony
today.

Ms. Jackson Lee. Mr. Gless, thank you for your testimony.
Mr. Moore, you are recognized for 5 minutes and welcome.

STATEMENT OF CHRIS MOORE, CHAIRMAN, TEAMSTERS AIRCRAFT
MECHANICS COALITION, INTERNATIONAL BROTHERHOOD OF TEAMSTERS

Mr. Moore. Okay, let us hit the on button this time, sorry.
Madame Chairwoman, thank you for the opportunity to testify
today on this vital issue of security at foreign repair
stations.
My name is Chris Moore, and I am the Chairman of the
Teamsters Aviation Mechanics Coalition. We represent 18,500
mechanics across 10 airlines. I hold an A&P license and have
been a mechanic at Continental Airlines' IAH facility since
1986.
Recently I had the opportunity to tour the Aeroman facility
in El Salvador about 30 miles south of San Salvador. One of the
Teamsters' major concerns regarding the foreign outsourcing of
aircraft maintenance is that the work is being done in
facilities located in developing nations where security,
safety, and quality standards are lax and inadequately
enforced.
In June, Southwest Airlines decided to offshore four lines
of heavy maintenance to the Aeroman facility. The labor unions
that represent workers at that airline were invited to send
representatives to El Salvador for the validation flight.
I was asked to represent the Teamsters Union on the trip.
We were required to travel with an armed escort and there were
armed guards patrolling outside many of the businesses in town
and then this raises a serious question to me about the
security in this Central American country.
We spent approximately 12 hours at the airport over a 2-day
period. My overall impression of this operation is that Aeroman
is a large line maintenance operation and not the overhaul
facility it is portrayed to be. Although Aeroman claims to have
machining, sheet metal fabrication, and composite repair, what
they actually have is limited capabilities in these areas.
For instance, the machine shop that I was shown only had a
couple of milling machines and a lathe, an odd saw here and
there. The sheet metal shop consisted of about 10 bending and
rolling machines located on the mezzanine between two tail
docks in the hangar. You get the picture of where I am going
with this.
Aeroman and its airline customers would have you believe
this is a first-class MRO. That was not my observation. So the
question begs to be asked, what else is an exaggeration? With
limited equipment, does work get outsourced to other facilities
and how is that tracked? So are they subcontracting?
Where is the U.S. oversight on background checks and drug
testing in this country that has very little infrastructure? At
the entrance to the facility, security personnel traded our
I.D.s for visitor badges. The guard shack was staffed with
armed guards. There was no electronic card reader to verify
that even the escort badges were valid.
The airport is located in a tropical rainforest. It is
surrounded by a perimeter chain-link fence with barbed wire on
top. It does not appear to be patrolled and there is no access
area cut around the outside of the fence. During my 2 days on
the property, I observed no perimeter patrols at all.
Aviation safety and security are built on layer upon layer
of redundancy. Those layers are being removed one by one. Is
there real control over who is actually working on our aircraft
in a developing economy? When the aircraft is stripped bare and
there are literally thousands of places where explosives and
other contraband can be hidden, are we willing to take that
chance?
The average wage in El Salvador is about US$350 a month. An
Aeroman mechanic can make as much as US$1,200 per month. What
will a man or woman do to keep this job?
Witness the NPR report by Dan Zwerdling on Aeroman that ran
last month where he reported an Aeroman mechanic was forced by
his supervisor to install the wrong fasteners in a critical
part of the aircraft structure.
This speaks volumes about how easily these workers can be
manipulated. What kind of pressure can a terrorist group, for
example, bring to bear on one of these workers if they decide
to use a U.S. aircraft as a weapon once it is back in the U.S.
air space?
While touring the facility, the DEA and local police did a
K-9 narcotics and explosive sweep of the Southwest aircraft we
were taking back home. Southwest officials advised me that this
would happen with all of their aircraft prior to the plane's
return to the United States.
However, there are no rules requiring this and it is
significant to note that the Aeroman rep claimed that Southwest
Airlines is the first of their customers to request such
searches. It should be noted at the time of my visit, US
Airways had four aircraft in various stages of overhaul and
JetBlue had one and to my knowledge, neither of these airlines
conduct similar drug or explosives sweeps.
Finally, the only way to ensure security is to raise the
standards of all foreign repair stations to that of the United
States. The proposed rulemaking goes a long way towards this
goal. However, checks of workers at foreign repair stations
need to be equivalent to U.S. standards.
In light of the DOT's inspector general is finding that 21
non-certified repair stations were performing work critical to
airworthiness, the TSA should consider extending security
standards to those facilities.
The FAA, TSA, DSA, or DEA should work closely together to
eliminate overlapping inspections but should ensure that both
safety and security inspections are carried out on a no-notice
basis as is the case in the United States.
U.S. aviation safety is recognized as the best in the
world. We should not allow any further degradation of that
proud and expected record in a quest to shore up the bottom
line or increase profits. Aviation security and safety is not
about money. It is about preventing accidents, protecting the
flying public, and saving lives.
Thank you again for the opportunity to express our views.
[The statement of Mr. Moore follows:]

Prepared Statement of Chris Moore
November 18, 2009

Madam Chairman, Ranking Member Dent, and Members of the
subcommittee: Thank you for the opportunity to testify today on this
vital issue of security at foreign repair stations. My name is Chris
Moore, and I am chairman of the Teamsters Aircraft Mechanics Coalition.
I hold an A and P license and have been a mechanic at the Continental
Airlines IAH facility since 1986.
The Teamsters Union Airline Division represents more than 43,000
airline employees, including 18,500 mechanics across 10 airlines,
customer service agents, reservationists, simulator technicians, ramp
agents, stock clerks, dispatch personnel, flight attendants, and
pilots. As such, our members are very concerned about the maintenance
and repair of aircraft that they and their families fly on every day.
The rapid growth of foreign repair stations can be partly attributed to
the economic turmoil that has embroiled the airlines in the last
decade.
The United States airline industry has been in a constant state of
financial turmoil since the Fall of 2000, when the decline in the
technology industry caused a precipitous decline in business travel
demand. The September 11, 2001 terrorist attacks greatly exacerbated
the industry's financial troubles, as airlines incurred significant
losses resulting from the temporary shutdown of the Nation's airspace
and passengers' apprehension about flying following the attacks.
Congress sought to alleviate the airline industry financial crisis
shortly after the September 11 attacks, when it passed the Air
Transportation Safety and System Stabilization Act, Pub. L. No. 107-42,
115 Stat. 230 (2001). Through that statute, Congress provided $5
billion in direct emergency assistance/grants to compensate air
carriers for their losses stemming from the attacks. Congress also
authorized the Department of Transportation to reimburse air carriers
for increases in their insurance premiums and provided billions of
additional dollars for loan guarantees.
Nevertheless, in the wake of record high fuel prices earlier this
year and the Depression-era crash of the Nation's financial markets,
the airline industry is still in economic tatters, and is projected to
lose $5.2 billion this year. Despite passenger capacity reductions and
recent cuts in fuel costs, the turbulent economic markets may continue
to wreak havoc upon and potentially further destabilize the industry.
While Congress has provided significant public assistance to the
airline industry over the last several years and may have to provide
even more next year, many of the carriers that benefited from such
taxpayer assistance have increasingly outsourced critical airline
maintenance jobs to foreign repair stations. Indeed, according to the
DOT Inspector General's September 30, 2008 report on the outsourcing of
aircraft maintenance, airlines have more than doubled the amount of
repairs and heavy maintenance work they outsource, from 34 percent in
2003 to 71 percent in 2007.
This huge increase in outsourcing of aircraft maintenance is
alarming for a number of safety, security, and economic reasons. First,
the Federal Aviation Administration simply is not equipped to audit the
work that is performed at foreign repair stations with the same level
of intensity as they can within our borders. Second, the outsourcing of
aircraft maintenance to foreign repair stations has set in motion a
dynamic in which workers in developing nations will do what is required
of them in order to stay employed, thus diminishing the safety and
security of the flying public. My testimony today will concentrate on
the security issues involving this increasing use of foreign repair
stations in providing maintenance and repairs to U.S. aircraft.
Foreign repair stations are not held to the same security standards
as domestic repair stations. Despite several mandates by Congress--the
earliest of which dated to 2003--to establish a security standard for
repair stations and audit foreign stations, the Transportation Security
Administration (TSA) has yet to issue a proposed rule. Foreign repair
stations, certificated by the FAA, are covered by FAR Part 145, as are
domestic repair stations, but critical exceptions are made in personnel
and security standards. Airline-owned maintenance bases are held to the
most stringent standards under Part 121 of the Federal Aviation
Regulations. Mechanics employed directly by airlines are subject to
drug and alcohol testing and criminal background checks as a condition
of employment; their hours of work are regulated by duty-time
limitations; and most must hold an FAA repairman certificate or an
Airframe and/or Powerplant (A&P) certificate. No person deemed a
terrorist threat by the TSA may hold any type of certificate.
Even if some foreign facilities claim they background check their
workers and utilize a drug and alcohol testing protocol, those programs
can only be as good as their government's systems allow. For example,
in the case of Mexican truck drivers being permitted to travel beyond
the currently permitted commercial zones, the United States has
required that Mexican truck drivers be subject to a random drug testing
program just as U.S. drivers are. While this was first proposed in
1995, to date, there is no lab in Mexico that has been certified to
test these specimens. The Department of Transportation's Inspector
General, in several audit reports, has continually cited chain of
custody problems as well. One might argue that drug and alcohol testing
is a pure safety issue, as it deals with the possibility of faulty
workmanship due to impairment, but in countries where drug cartels are
prevalent, the use of drugs may speak volumes about the vulnerability
of a person working at a foreign repair station.
In the matter of issuing Free and Secure Trade (FAST) credentials
to Mexican drivers to take advantage of that program, the TSA, not the
Mexican government, conducts the background checks on those drivers.
Does the Mexican Government lack the capability and or the databases to
do so? Canada conducts its own background checks for the FAST program.
While the Teamsters Union strongly supports a background check for
workers at foreign repair stations who provide maintenance or repair
services on U.S. aircraft, we are equally concerned about the process
for doing so.
I recently had the opportunity to visit a Maintenance Repair
Overhaul (MRO) facility in a developing economy. That facility is
Aeroman, located at the El Salvador International Airport, about 30
miles south of the city of San Salvador. It is surrounded by a tropical
rain forest. According to FAA data, Aeroman employs a total of 1,200
people, including 712 non-certificated mechanics and 167 certified
mechanics. The mechanics reportedly hold Salvadoran licenses that are
recognized by the European Union Safety Agency. As you may know, one of
the Teamsters' major concerns regarding the foreign outsourcing of
aircraft maintenance is that the work is being done in facilities
located in developing nations where security, safety, and quality
standards are lax and inadequately enforced. Aeroman's facility
definitely fits this description.
In June of this year Southwest Airlines made the decision to
offshore four lines of heavy maintenance to the Aeroman facility in El
Salvador. Southwest airlines is known for its good employee relations
and in that spirit invited all of the labor unions that represent
workers at the airline to send a representative to El Salvador for the
``Validation Flight''. As Chairman of the TAMC, I was asked to
represent the Teamsters Union on the trip. Once in country we split in
to a couple of groups. I stayed with the maintenance reps and toured
the facility while the others went to the U.S. Embassy to work out the
logistics of Southwest's new venture. I was a bit taken aback by the
fact that we were required to travel with an armed escort and that
there were armed guards patrolling outside many of the businesses in
town. This raises serious questions in my mind about the security in
this Central American country.
We spent approximately 12 hours at the airport over a 2-day period.
We were given a tour of the facility that allowed us to walk through an
aircraft that was in work, although no one was working it at the time
and it was completely gutted. Throughout the tour of the facility, we
were escorted by a representative of Aeroman. This made it difficult to
approach the workers to ask them questions about their working
conditions and to obtain their perspectives.
My overall impression of the operation is that Aeroman is a large
``Line Maintenance'' operation and not the overhaul facility it is
portrayed to be. If you walk the floor at the United Airlines SFO base
you will understand what a true MRO should look like. Although Aeroman
claims to have machining, sheet metal fabrication, and composite
repair, what they actually have is limited capability in these areas.
In fact if you read their repair station certificate, it states that
they only have limited capability in these areas. For instance, the
machine shop I was shown had only two milling machines, a lathe, and
the odd saw here and there. The sheet metal shop consisted of about 10
bending, rolling, and shearing machines located on the mezzanine
between two tail docks in one of the hangars, essentially on the floor.
The emergency evacuation slide shop is an empty room! The composite
repair area is much the same. Aeroman and its airline customers would
have you believe that this is a first class MRO. That was not my
observation. So the question begs to be asked--what else is an
exaggeration? When the Aeroman representative was asked about drug
testing the answer came back, absolutely. Where is the oversight? At
Continental the specimen is collected on-site and FAA drug abatement
protocol is followed to the letter. To what standards are foreign MRO's
being held? On the subject of background checks, in a country that has
very little infrastructure, how can you validate a background check?
Again, where is the oversight and what procedures are followed?
The only security I saw was at the gate coming into the facility
where we traded our ID for a visitor badge. There was a guard shack
manned by armed guards. There was no electronic card reader to verify
that even the escort badges were valid. In the United States, the
escort must have a valid ID in order to bring visitors onto the
facility. You must pass the background check to obtain this badge. In
Houston, the background check to obtain your security clearance goes
back to age 16. The airport is surrounded by a perimeter fence of chain
link with barbed wire and/or razor wire topping it. It is, from the
looks of it, rather dated. I could only see the fence in areas that I
toured and along the highway. It does not appear to be patrolled, as
there is no access area cut around the outside of the fence as you have
in the United States. During my 2 days on the property, I never
observed any perimeter patrols.
My concern is this. Aviation safety and security are built on layer
upon layer of redundancy. We are seeing those layers being removed one
by one. Is there real control over who is actually working on our
aircraft in a developing economy? When the aircraft is stripped bare
and there are literally thousands of places where explosives or other
contraband can be hidden, are we willing to take that chance? The
average wage in El Salvador is US$350.00. An Aeroman mechanic can make
as much as US$1,200.00 per month. What will a man or woman do to keep
this job? Witness the NPR report by Dan Zwerdling on Aeroman that ran
in October 2009, where he reported that an Aeroman mechanic was forced
by his supervisor to install the wrong fasteners in a critical part of
the aircraft structure. These Hy-Shear fasteners are designed to fail
under stress, thus protecting the actual structure from failure. This
speaks volumes about how easily these workers can be manipulated. El
Salvador is a country where the Mexican drug cartel can bug not only
the presidential offices but also his personal residence. The U.S. Drug
Enforcement Agency is woefully undermanned--only one agent for the
entire country at the time of my visit. What kind of pressure can the
cartel bring to bear on one of these workers if they decide to make a
point to the United States by destroying an aircraft once it is back in
service in U.S. airspace?
While touring the facility, the DEA and local police did a
narcotics and explosives K-9 sweep of the Southwest Airlines aircraft
that was our transportation back to the States. The dogs belonged to
the local police force, and it was not stated what type of training the
dogs or handlers received. Southwest officials advised me this would
happen with all of their aircraft prior to those planes returning to
the United States. Again, as is the case with representations that were
made regarding background checks and drug testing, I have no way of
verifying the accuracy of this statement as there is no rule in place
to mandate it. It is significant to note that Aeroman claims that
Southwest Airlines is the first of their customers to request such
searches and tests. Even if this is true, Aeroman's comment underscores
and validates the Teamsters Union's argument that maintenance work
outsourced to foreign countries raises serious safety concerns because
the work is not subject to the same stringent safety and security
standards and oversight that apply in the United States. (It should be
noted that at the time of my visit, US Airways had four aircraft in
various stages of overhaul and Jet Blue had one). To my knowledge, none
of those airlines conducts the drug and explosives sweep as Southwest
Airlines had done, before returning planes to the United States.
Finally, the only way to ensure security is to raise the standard
of any foreign repair station to that of the United States regardless
of any trade agreements. Regulations to ensure the security of foreign
repair stations, to every extent possible, should closely mirror the
standards established in 49 CFR Chapter XII that govern air carriers
and airports, regarding worker background checks, access to aircraft
and facility perimeter security. Worker security awareness training
should also be part of a required security plan submitted to the
Department of Homeland Security and the Federal Aviation Administration
for approval. Those agencies should work closely together to eliminate
overlapping inspections, but should ensure that both safety and
security inspections are carried out at least twice yearly without
notice given to the facility. There must be ``24/7/365'' oversight
available. That would require coordinated deployment of FAA/TSA/DEA
manpower in such a way that inspections can be performed and records
checked with the ``no notice'' capability.
At least 21 non-certificated repair stations in foreign countries
have been identified by DOT's Inspector General as performing
maintenance ``critical to the airworthiness of the aircraft.'' Because
of the level of work involved, those facilities should fall under the
same security requirements as certificated foreign repair stations.
Foreign repair stations receive work from both U.S. and other foreign-
owned airlines. If regulations applying drug and alcohol testing and
background checks would apply only to workers who service U.S.
aircraft, then access rules need to be developed within the facility to
segregate those workers from others who may be on the property.
U.S. aviation safety is recognized as the best in the world. We
should not allow any further degradation of that proud and expected
record in a quest to shore up the bottom line or increase profits.
Aviation security and safety is not about money; it is about preventing
accidents, protecting the flying public, and saving lives.
Thank you again for the opportunity to express our views on this
important issue of security of foreign repair stations. I am pleased to
answer any questions you may have.

Ms. Jackson Lee. Thank you very much.
Mr. Barimo, you are recognized for 5 minutes.

STATEMENT OF BASIL J. BARIMO, VICE PRESIDENT, OPERATIONS AND
SAFETY, AIR TRANSPORT ASSOCIATION OF AMERICA, INC.

Mr. Barimo. Good afternoon. I am Basil Barimo. I am the
vice president of Operations and Safety for the Air Transport
Association of America.
I appreciate the opportunity to join you this afternoon as
we consider the role of aircraft repair stations in air carrier
maintenance programs. Our experience confirms that contract
maintenance can, in fact, be both safe and secure. This
afternoon, I want to focus on three points.
First, that maintenance contracting does not compromise
safety or security. Secondly, that maintenance contracting
enables U.S. airlines to compete globally. Finally, that
maintenance is good business for the United States and any
nearsighted efforts to limit access to foreign repair stations
will cost us jobs.
Safety is the constant overriding consideration of our
members' activities. They understand their responsibilities and
they act accordingly. The U.S. industry's stellar safety record
demonstrates that unflagging commitment.
So, let us talk about facts. Maintenance contracting has
increased over the last decade, but as the chart on page six of
my written testimony clearly shows, the U.S. airline industry's
maintenance safety record is the best it has ever been.
In fact, no ATA member airline has experienced a
maintenance-related fatal accident in nearly a decade, and that
is while operating over 100 million flights. If there were a
systemic problem with contract maintenance, the data would have
exposed it.
Contract maintenance is common and commonly accepted in the
industry. Virtually every airline to some degree relies on
contract maintenance.
Whether it is in the form of line maintenance, heavy
maintenance, component, or engine maintenance, aircraft
operators with demanding and highly sophisticated maintenance
needs, including various branches of the U.S. military,
contract for maintenance services. It is not an exotic practice
regardless of where it is done.
That multilayered and continuous oversight of contract
maintenance does more than ensure a safe aircraft, it enhances
what is already a robust security system, a complex system with
checks and balances originally designed with safety in mind,
are interwoven with comprehensive security and asset protection
systems to mitigate risks regardless of their nature.
Keep in mind that we are talking about assets worth
hundreds of millions of dollars. It is clearly in the airline's
and the repair station's interest to protect aircraft as they
are being maintained.
I must also note that the ATA welcomes the NPRM issued
Monday by the TSA. It will establish security regulations for
repair stations, and we look forward to working closely with
TSA to further enhance today's robust security system.
Continued access to high quality, cost-effective
maintenance is one ingredient in airlines' efforts to remain
competitive both here and abroad. Maintaining a competitive
cost structure is critical to the health and sustainability of
U.S. airlines.
For this reason, we oppose efforts to limit the ability of
U.S. airlines to obtain necessary services consistent with the
highest degree of safety and security as economically as
possible.
Maintenance is good business for the United States. The
search for quality, efficiency, and value has meant that some
airlines have shifted where their maintenance is done. Some
have consolidated in-house facilities.
Other times, it has meant contracting with a third party,
sometimes overseas, to perform some of that airline's
maintenance. Neither type of change is pleasant. Both can
adversely affect employees, their families, and their
communities.
It has, however, meant new job opportunities for some and
new benefits for some communities. Far from resulting in the
export of the majority of U.S. maintenance jobs overseas, it
has meant that we have been able to retain them in the United
States.
The United States is a major exporter of maintenance
services and enjoys a $2.4 billion positive balance of trade in
this area. The over 4,000 FAA-certificated repair stations
employ about 200,000 people, and keep in mind that 85 percent
of those repair stations qualify as small businesses. Efforts
to limit U.S. airline access to foreign repair stations will
certainly trigger retaliatory actions by other countries.
In closing, let me reiterate that maintenance contracting
is done safely and securely round the world. It is important to
the health and viability of U.S. airlines, and finally it
creates American jobs. Madame Chairwoman, thank you for
allowing me to share our views, and I look forward to your
questions.
[The statement of Mr. Barimo follows:]

Prepared Statement of Basil J. Barimo
November 18, 2009

INTRODUCTION

The Air Transport Association of America, Inc. (ATA), the trade
association of the principal U.S. passenger and cargo airlines,\1\
appreciates the opportunity to submit these comments for the record on
safety and other issues affecting the U.S. airline industry. ATA member
airlines have a combined fleet of more than 4,000 airplanes and account
for more than 90 percent of domestic passenger and cargo traffic
carried annually by U.S. airlines.
---------------------------------------------------------------------------
\1\ ABX Air, Inc.; AirTran Airways; Alaska Airlines, Inc.; American
Airlines, Inc.; ASTAR Air Cargo, Inc.; Atlas Air, Inc.; Continental
Airlines, Inc.; Delta Air Lines, Inc.; Evergreen International
Airlines, Inc.; Federal Express Corp.; Hawaiian Airlines; JetBlue
Airways Corp.; Midwest Airlines; Southwest Airlines Co.; United
Airlines, Inc.; UPS Airlines; and US Airways, Inc.
---------------------------------------------------------------------------
Safety is the constant, overriding imperative in our members'
activities. They understand their responsibilities and they act
accordingly. The U.S. airline industry's stellar safety record
demonstrates that indisputable commitment.

AIRLINES FUEL OUR NATION'S ECONOMY

The U.S. airline industry is not simply an important sector of the
National economy; its services fuel our entire economy. Air
transportation is an indispensable element of America's infrastructure
and our Nation's economic well-being. Individuals, businesses, and
communities depend on the National air transportation system. U.S.
airlines transport more than 2 million passengers on a typical day and
directly employ 557,000 persons to do so; they provide just-in-time
cargo services; they are the backbone of the travel and tourism
industry; and airlines link communities throughout our Nation and to
the world.
Moreover, the airline industry is the foundation of the commercial
aviation sector, which comprises airlines, airports, manufacturers, and
associated vendors. U.S. commercial aviation ultimately drives more
than $1.1 trillion in U.S. economic activity and 10.2 million U.S.
jobs.\2\ By any measure, the U.S. airline industry is a valuable
National asset and its continued economic health should be a matter of
National concern.
---------------------------------------------------------------------------
\2\ Federal Aviation Administration, ``The Economic Impact of Civil
Aviation on the U.S. Economy'' (October 2008).
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THE SAFEST AIRLINES IN THE WORLD

Despite the unprecedented travails of the U.S. airline industry
throughout this decade, its safety record has continued to improve. The
airlines' commitment to safety, even in the face of unprecedented
financial adversity, has been unflagging and will remain so.
The U.S. airline industry continues to be confronted by a systemic
inability to cover its cost of invested capital. From 2001 through
2008, U.S. passenger and cargo airlines reported a cumulative loss of
$55 billion. Debt levels remain high, leaving the airlines vulnerable
to fuel spikes, recession, or exogenous shocks (e.g., terrorism,
pandemics, natural disasters), let alone ill-advised public policy
decisions. The challenge we face is to achieve meaningful and
sustainable profits, and to improve credit ratings to the point where
airlines can weather normal economic turbulence while simultaneously
investing in the future.
Notwithstanding these financial challenges, airline safety has
remained rock solid. While the Colgan Air tragedy earlier this year
ended a 2-year period without a fatal accident, the United States
continues to lead the world in airline safety. Without question,
scheduled air service is incredibly safe and getting safer; maintenance
certainly plays a role in that remarkable achievement.

[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]

The preceding chart clearly depicts the remarkable improvement in
airline safety that has occurred over time. U.S. air carrier accidents
are rare and random. A prominent reason for this is the extraordinary,
long-standing collaboration among the Federal Aviation Administration
(FAA), National Transportation Safety Board (NTSB), NASA,
manufacturers, airlines and their unions, and of course, maintenance,
repair, and overhaul service providers (MROs). That collaborative
relationship is firmly entrenched in the aviation community; indeed, it
has strengthened over the years. Programs such as the joint Government-
industry Commercial Aviation Safety Team (CAST), Flight Operational
Quality Assurance (FOQA) programs, Aviation Safety Action Programs
(ASAP) and Line Operations Safety Audit (LOSA) programs are important,
tangible results of that on-going collaboration. In fact, CAST was
awarded the prestigious 2009 Collier Trophy for reducing the fatal
accident risk by 83 percent since its creation in 1997.
These collaborative safety-improvement efforts have created a
safety management system that is data-driven and based on risk
analysis. That undistracted focus on data enables safety-related trends
to be identified, often before they emerge as problems, and properly
resolved. This objective and measurable approach means that we apply
our resources where the needs actually are, not where conjecture or
unverified assumptions might lead us. We can and do spot these trends,
whether they are operational or maintenance-related. With respect to
the long-standing practice in the airline industry of using the
expertise of regulated contractors to perform maintenance services, the
data quite clearly tell us that safety doesn't suffer.

MAINTENANCE CONTRACTING IS NOT A NEW CONCEPT

In simple terms, contract maintenance is the process explicitly
allowed by FAR 121.363(b),\3\ where airlines hire experts to perform
maintenance tasks. The type of maintenance involved can range from
minor servicing to major overhaul of components, engines, or the
airframe itself.
---------------------------------------------------------------------------
\3\ FAR 121.363 Responsibility for Airworthiness states that: (a)
Each certificate holder is primarily responsible for: (1) The
airworthiness of its aircraft, including airframes, aircraft engines,
propellers, appliances, and parts thereof; and (2) The performance of
the maintenance, preventive maintenance, and alteration of its
aircraft, including airframes, aircraft engines, propellers,
appliances, emergency equipment, and parts thereof, in accordance with
its manual and the regulations of this chapter; (b) A certificate
holder may make arrangements with another person for the performance of
any maintenance, preventive maintenance, or alterations. However, this
does not relieve the certificate holder of the responsibility specified
in paragraph (a) of this section.
---------------------------------------------------------------------------
Airlines exist to transport people and goods. In order to survive,
they must do it safely, but to thrive in a fiercely competitive, global
environment, they must also do it efficiently. Safety need not be
compromised because of considerations of efficiency; in fact, it can be
significantly advanced in an environment where a focus on efficiency
spurs a willingness to reexamine time-worn practices and encourages
innovation that embraces newer--and improved--practices.
The maintenance of commercial airliners is a complex, capital-
intensive business requiring specialized equipment and facilities along
with highly skilled personnel. One implication of this is that using a
maintenance facility or facilities with specialized skills is likely to
be considered. Complexity inevitably will lead a carrier to examine
dividing maintenance functions; some airlines will elect to do so while
others will not. Either way, examining alternative sources in this type
of environment is entirely reasonable.
Moreover, current airline business models demand continual scrutiny
of costs, commonly with a bias to shed non-core activities. In the case
of maintenance, there are many incentives to utilize contract
maintenance providers, including:
Access to specialized repair facilities when and where they
are needed;
Avoidance of major capital investments (equipment and
facilities);
Increased utilization of existing facilities;
Improved employee focus on core airline activities;
Optimization of flight schedules around customer demand,
instead of maintenance infrastructure availability;
Exceptional quality at a reduced cost.
As expected, the level of contract maintenance utilized by
individual airlines varies significantly based on factors such as the
type(s) of aircraft used, geographic region of operation, business
philosophy, labor agreement limitations, internal cost structure, and
commercial relationships with airframe, engine, and component
manufacturers. Without exception, all airlines rely to some extent on
contract maintenance providers. This is a point that should not be
obscured: Contract maintenance is a commonly accepted practice in this
industry. The extent to which it is utilized may vary from airline to
airline but there is nothing out of the ordinary about its use.
Further, airlines are by no means unique in their reliance on
contract maintenance. In fact, many industries rely heavily on contract
maintenance providers for a broad range of services. Trains, buses, and
cruise ships are predominantly maintained by companies other than those
who operate them. The United States Department of Defense contracts
with private companies for the maintenance of aircraft, in many cases
the same companies utilized by commercial airlines. As this widespread
pattern of relying on contract maintenance suggests, operators with
very demanding and sophisticated needs routinely and successfully
outsource maintenance.

STATISTICS DON'T LIE

Commercial airlines have utilized contract maintenance for decades.
The industry's reliance on contract maintenance providers increased
since 2001 as airlines restructured their business models. The
implications of this change have been misunderstood. It does not signal
a diminution in safety or a ``slippery slope.'' Critics of contract
maintenance argue that ``If airlines don't perform all of the
maintenance themselves, then they can't be safe.'' Independent data
from the National Transportation Safety Board (NTSB) proves them wrong.
Based on data compiled by the NTSB, maintenance-related accidents
account for just 7 percent of all Part 121 accidents over the last
decade. Furthermore, ATA member airlines have not had a fatal accident
attributable to maintenance since 2000.

[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]

The preceding chart clearly illustrates that U.S. airlines' use of
contract maintenance has not been a detriment to safety. In fact,
maintenance-related safety performance is the best it's ever been. It
is simply not reasonable, based on the data available, to consider the
practice of maintenance contracting to be unsafe.
Mechanical dispatch reliability is another indicator of the
effectiveness of maintenance programs. It is important to note that the
U.S. commercial airline fleet is maintained to impeccable standards,
which are reflected in mechanical reliability performance. As shown in
the chart below for Boeing models (and noting that Airbus and other
models perform comparably), airline maintenance programs are yielding
unprecedented levels of mechanical reliability, which in turn,
contribute to overall safety performance.

[GRAPHIC(S)] [NOT AVAILABLE IN TIFF FORMAT]

EFFECTIVE OVERSIGHT IS THE KEY

Air carriers understand that aircraft maintenance is vital to
continued operational safety. Likewise, safe operations are essential
to compliance with regulatory requirements and, ultimately, to an
airline's existence. Over time, the industry has developed a
comprehensive, multilayered approach to oversight that ensures the
highest levels of quality and safety, regardless of who does the work
or where that work is performed. This point cannot be overstated:
Safety is what counts, first and foremost.
Initial levels of protection are contained in the FAA regulations,
which provide a basic framework to ensure competence among those
certificated to perform aircraft maintenance.\4\ Prior to granting
certification, the FAA confirms that an entity or individual has
fulfilled specific regulatory requirements.
---------------------------------------------------------------------------
\4\ See, for example, 14 CFR parts 121, 145, and 65.
---------------------------------------------------------------------------
Part of this approval process involves the issuance of Operations
Specifications (OpSpecs) by the FAA. Air carrier OpSpecs contain a
specific section to address aircraft maintenance, and repair station
OpSpecs delineate the ratings and limitations of the maintenance that
can be performed. In FAA Order 8300.10, Volume 2, Chapter 84, it is
stated, in part, that:

``OpSpecs transform the general terms of applicable regulations into an
understandable legal document tailored to the specific needs of an
individual certificate holder. OpSpecs are as legally binding as the
regulations . . .'' (Citations omitted).

Once certificated, air carriers and repair stations are inspected
and monitored by the FAA to verify their continued conformity with the
rules. This on-going surveillance process can be viewed as the second
layer of safety.
Additionally, certificated air carriers acquire the nondelegable
responsibility for the airworthiness of the aircraft in their fleet.\5\
The backbone of any air carrier's airworthiness is its Continuing
Analysis and Surveillance System (CASS). CASS is a quality-assurance
system required by FAR 121.373, consisting of surveillance, controls,
analysis, corrective action, and follow-up. Together, these functions
form a closed-loop system that allows carriers to monitor the quality
of their maintenance. In a structured and methodical manner, the CASS
provides carriers with the necessary information to enhance their
maintenance programs.
---------------------------------------------------------------------------
\5\ See 14 CFR 121.363, which provides that: (a) Each certificate
holder is primarily responsible for: (1) The airworthiness of its
aircraft, including airframes, aircraft engines, propellers,
appliances, and parts thereof; and (2) The performance of the
maintenance, preventive maintenance, and alteration of its aircraft,
including airframes, aircraft engines, propellers, appliances,
emergency equipment, and parts thereof, in accordance with its manual
and the regulations of this chapter; (b) A certificate holder may make
arrangements with another person for the performance of any
maintenance, preventive maintenance, or alterations. However, this does
not relieve the certificate holder of the responsibility specified in
paragraph (a) of this section. (Emphasis added.)
---------------------------------------------------------------------------
Aircraft maintenance is the primary ingredient of airworthiness and
FAA regulations contain detailed maintenance program and manual
requirements,\6\ which validate the related air-carrier processes and
procedures. When work is sent to a repair station, it must follow the
maintenance program of the air carrier with whom it has contracted.\7\
Combined, these duties comprise the third level of protection.
---------------------------------------------------------------------------
\6\ See 14 CFR 121.365; 121.367; 121.369.
\7\ See 14 CFR 145.205 which states, in part, that: (a) A
certificated repair station that performs maintenance, preventive
maintenance, or alterations for an air carrier or commercial operator
that has a continuous airworthiness maintenance program under part 121
or part 135 must follow the air carrier's or commercial operator's
program and applicable sections of its maintenance manual. (Emphasis
added.)
---------------------------------------------------------------------------
Apart from external FAA surveillance, and in line with their
ultimate responsibility for airworthiness, airlines conduct in-depth
initial and frequent follow-up maintenance vendor audits. As a rule,
these audits are performed by air carrier quality, compliance, or
inspection department employees, but oftentimes may include outside
counsel and/or consulting firms who specialize in air-carrier
maintenance. These audits create a robust fourth level of oversight.
Industry protocol for conducting and substantiating independent
audits of air carriers and repair stations is established by the
Coordinating Agency for Supplier Evaluation (C.A.S.E.). In addition,
guidance materials and inspection checklists created for FAA inspectors
are frequently used.
Typically, preliminary investigation of a potential repair station
vendor by an air carrier would include:
Review of repair station performance and quality metrics;
Feedback from past and current repair station customers;
Verification of repair station capabilities (OpSpecs);
Review of FAA-mandated Repair Station Manual, Quality
Manual, and Training Manual.
If this repair station examination is satisfactory, it is normally
followed by an on-site visit to verify compliance with applicable
regulations, C.A.S.E. requirements and adherence to the repair
station's own manuals. Some areas of investigation include:
Validation of FAA certificates held by persons directly in
charge of maintenance and/or those who perform maintenance;
Inspection of training records of inspectors, technicians,
and supervisors;
Examination of procedures for technical data, documentation,
and maintenance record control;
Examination of procedures for work processing, disposal of
scrap parts, tool calibration, and handling material with a
limited shelf life;
Review of repair station internal inspection, quality, and
security programs;
Review of previous inspection program results and corrective
actions.
If the repair station is selected to perform maintenance for the
air carrier, similar on-site audits would be conducted on a regular
basis.
Finally, a fifth layer of oversight is provided by on-site air-
carrier representatives. These individuals monitor the day-to-day
operations and coordinate the activities of the repair station related
to the air carrier's equipment. Final inspections and, ultimately, air
carrier approval for service are normally accomplished by these on-site
airline personnel.
In essence, there are two separate but mutually reinforcing
oversight schemes, one regulatory and one independent, both effective
in ensuring satisfaction of applicable FAA regulations. However, air
carriers have further incentive to provide adequate oversight through
the potential negative impact--real or perceived--of safety-related
issues. Without question, air carriers continue to make safety their
top priority. Safety is ingrained in our culture.

SAFETY AND SECURITY LAYERS ARE INTERWOVEN

Security of repair station activities is a constant consideration.
As in other areas of civil aviation security, the response to this
issue is a layered, risk-based approach.
The subject of foreign repair station security measures continues
to attract attention. We wish to clarify a few points about those
measures. As a preliminary matter, we support the Congressional
instruction to the Transportation Security Administration to issue
foreign repair station security regulations. It is imperative that
those regulations recognize that repair stations vary in size,
location, and scope of work performed, and tailor security measures
commensurate with the level of risk they present. We plan to thoroughly
review the TSA proposed rule, published Nov. 16, 2009, with our member
airlines, and to submit detailed comments to the docket.
Mutually reinforcing U.S. and host-country regulatory requirements
and carrier practices produce the layered security regime at foreign
repair stations. This begins with a U.S. air carrier's evaluation of a
potential service provider before it enters into a contract for
maintenance, repair, or overhaul services. This is an important first
step for the carrier; it is looking to entrust an aircraft or high-
value components to a vendor. The carrier obviously wants to prevent
unauthorized access to such equipment and to be confident that the
potential vendor can do so. Beyond that very basic business concern,
are the security requirements that the country's civil aviation
authority and the airport authority impose. These are based on
International Civil Aviation Organization (ICAO) standards contained in
Annex 17 and mirror TSA regulations. They require National, airport,
and operator-level security programs with continuous threat monitoring,
background checks, and periodic ICAO audits. Those requirements are
further reinforced by periodic TSA inspections. Coupled with those
requirements, is the typical presence of representatives of the U.S.
carrier at the foreign facility. Weaved into this array of measures is
the FAA requirement that repaired or overhauled items be inspected when
they are returned to the U.S. carrier, and before they are returned to
service aboard an aircraft. This means that multiple sets of trained
eyes inspect a part that has been at a foreign repair station. Finally,
before an aircraft is returned to passenger service from a foreign
location, it must complete the aircraft security inspection procedures.
These complementary procedures yield a layered approach, which is
the hallmark of how aviation security is achieved today. We appreciate
the issuance by TSA of the proposed rule and look forward to continuing
to work with U.S. and foreign regulators on these measures.

GLOBAL COMPETITION, LOCAL POLITICS

U.S. airlines continually lead the world in virtually every
performance metric, including safety. Their ability to compete
effectively on a global scale is due, at least in part, to their
ability to evolve with changing market conditions. Airlines across the
United States and around the world have formed alliances that extend
beyond their networks to many aspects of airline operations, including
maintenance. These complex relationships involve airlines, aircraft
manufacturers and a host of service providers.
The loss of some 150,000 airline jobs since 9/11 has been well-
documented. As airlines downsized to meet a reduced demand for air
travel, it became even more difficult for them to efficiently utilize
their exhaustive maintenance infrastructure. Fleet reductions targeted
older, maintenance-intensive aircraft, leaving too few aircraft being
maintained at too many facilities, and airlines looked to contract
maintenance providers as a way to secure quality maintenance while
shedding the expensive infrastructure costs. It is the subsequent
impact on maintenance employees that draws attention to the issue of
maintenance contracting.
The debate surrounding the issue of contract maintenance is best
understood when broken down into several key points:
Most statistics relating to the amount of maintenance
contracted are based on the amount an airline spends. The
amount ``outsourced'' is derived by dividing the amount spent
on contract maintenance by the total maintenance cost for the
airline. These include all costs associated with the
maintenance of airframes, engines, and components.
Engine maintenance is much more expensive per event than
airframe maintenance, due largely to the replacement of
expensive parts within the engine. The fact that virtually all
engine maintenance is performed outside the airline can skew
the numbers.
Even the largest engines are readily transportable, enabling
access to repair centers around the world. Engine manufacturers
such as GE, Pratt & Whitney, and Rolls-Royce rely on their
subsidiaries worldwide for maintenance of their products,
although much of that work is performed domestically. Large
U.S. airline MROs also maintain engines for foreign and
domestic customers.
Heavy airframe maintenance performed by MROs outside of
North America is limited primarily to wide-body aircraft.
Regularly scheduled operations enable these long-range aircraft
to routinely transit locations abroad that offer best-in-class
maintenance for these aircraft types. Asia and Europe do much
of this work.
The majority of narrow-body aircraft maintenance work
contracted out in the past few years has stayed within North
America. MROs in Washington, North Carolina, Florida, New York,
Georgia, Tennessee, Arizona, Texas, Alabama, and Indiana are
among those now performing the work. Large airlines with
available capacity have also captured a portion, and the
remainder is performed by experts in Central/South America and
Canada.

CONCLUSION

U.S. airlines have logged an exceptional safety record while
steadily expanding their use of contract maintenance. And while critics
charge that maintenance contracting undermines safety and security,
independent Government figures simply do not support that conclusion.
When considered objectively, it is evident that the practice helps U.S.
airlines compete effectively with their global counterparts. The
ability to optimize maintenance practices to produce safe, reliable,
customer-worthy aircraft at a competitive cost is essential to
airlines' long-term health. Healthy airlines grow, adding service to
new destinations and increasing service to existing ones. That growth
requires new aircraft, creating new jobs within the airline for pilots,
flight attendants, ramp, and customer-service personnel, and a wide
range of support staff. Beyond the airline, the impact grows
exponentially and is felt Nation-wide by manufacturers, ATC service
providers, airports, caterers, fuelers--the list goes on and on.
Contract maintenance has played and continues to play an important role
in improving the health and competitiveness of the U.S. airline
industry--in a way that is entirely consistent with our fundamental
commitment to safety.

Ms. Jackson Lee. Thank you very much.
Mr. Klein, you are recognized for 5 minutes.

STATEMENT OF CHRISTIAN A. KLEIN, EXECUTIVE VICE PRESIDENT,
AERONAUTICAL REPAIR STATION ASSOCIATION

Mr. Klein. Thank you very much, Chairwoman Jackson Lee, and
it is a pleasure to be with you today. I appreciate the
opportunity to participate in this important discussion on
behalf of ARSA's members around the country and around the
world.
There are three major points I would like to make this
afternoon. First, I want to start by answering the basic
question posed by this hearing: Is the flying public safe?
The answer is yes. The use of contract maintenance
facilities, whether they are in the United States or overseas
do not add any additional security or safety risks for airline
passengers. In fact, the increased use of contract maintenance
has coincided both with a period of greatest of terrorism in
the Nation's history and also with the safest period of U.S.
civil aviation.
We believe this correlation suggests, at a minimum, that
the increased use of repair stations has not negatively
affected safety or security. There is a simple reason and, to
be quite frank, it has nothing to do with Government. For
repair stations, good safety and good security practices are
good business.
Airlines simply will not risk the lives of passengers, nor
will they risk losing aircraft which are multimillion-dollar
business assets, by using maintenance providers that evidence a
strong commitment to safety and security. So even in the
absence of a long-awaited TSA repair station rules, maintenance
companies already have security policies and procedures in
place.
For example, as part of our model repair station manual,
ARSA recommends a number of best security practices. A highly
reliable ARSA member survey conducted just last week found that
the majority of our members currently have the following
measures in place, limited access to a single-locked entrance,
criminal background checks on new employees, a prohibition on
unescorted visitors, customer products are kept in segregated,
locked, limited-access areas, locked doors, security alarm, a
visitor sign-in log and perimeter fencing.
A large percentage of our member companies also use video
surveillance and require employees to wear badges. In other
words, a lot of the things that are contemplated by the TSA
rule that came up last week are already being done by industry
on its own.
Of course, all those practices are in addition to the
existing TSA regulations regarding access to aircraft at
airports, in addition to ICAO security standards, and in
addition to laws requiring pre-employment citizenship
verification. All the foregoing have combined to create a safe
and secure system, even in the absence of the TSA repair
station rules.
The second point that I have asked the Members of this
committee to keep in mind is that although the public focus of
the new TSA rules has been on foreign repair stations,
thousands of small businesses throughout the United States are
also going to have to comply with the TSA rules, and they could
therefore, have enormous consequences for the U.S. economy.
When most people think of aviation maintenance, they
probably think of a big airplane in a massive hanger with
scores of mechanics swarming around it. While heavy air
framework is certainly a big part of the maintenance equation,
most aviation maintenance work is done off the aircraft, away
from airports, at smaller, specialized engine and component
shops. In fact, of the 4,122 repair stations Nation-wide, 85
percent are small or medium-sized entities.
Just as an aside if you are curious about the industry's
footprint in your State, we have attached a breakdown of the
number of repair stations and total employment in each State as
Appendix A of our written testimony. There are 419 FAA-
certificated repair stations in Texas. They collectively employ
more than 25,000 people.
Although industry in the United States is dominated by
small companies, we have a massive economic footprint. The
annual maintenance, repair, and overhaul market in North
America is estimated at $19.4 billion, and when induced and
related economic effects are considered, the MRO industry's
impact on the U.S. economy is $39 billion per year.
Thanks to these small companies, the United States also has
a strong and favorable annual balance of trade in the market
for aviation maintenance services to the tune of $2.4 billion.
My point is that it won't just be the HEICOs and Lufthansa
Techniks of the world that will be affected by the new rules.
Companies like High Tech Finishing, which a 65-employee company
in Houston that does specialized plating work, is also going to
have to comply.
So I caution the Members of the subcommittee to be careful
what you wish for when it comes to the new security rules
because you have got constituents who are going to have to
divert time and resources away from serving customers to comply
with yet another regulation.
You had asked your opening statement for our
recommendations about what should be in the TSA rule, and I,
you know, based on our initial read, they seem to have
recognized the diverse nature of the industry which is a good
thing. They seem to have allowed some flexibility for
compliance. So, you know, based on the preamble, they seem to
be headed in the right direction.
But of course, the devil will be in the details. We are
certainly looking forward to TSA and crafting a good rule that
going to work for the industry, because if TSA doesn't get it
right, it is a good bet that you are going to hear about it
when you are back home.
Madame Chairwoman, I see that my time is about to expire,
and I wonder if I could have just 1 more minute to make a final
point. Thank you.
My third point is that in mandating the new security rules,
Congress has set a very dangerous precedent of punishing
industry for the failings of Government. Because TSA hasn't
completed the rulemaking on time, Congress has barred the FAA
from issuing new foreign repair station certificates.
While Congress likely intended foreign companies to bear
the brunt of this sanction, the reality is that it is putting
U.S. companies at a competitive disadvantage because they can't
open new facilities to service international customers in
emerging markets. That means American companies risk losing
market share to foreign competitors.
As one respondent to our recent survey commented, ``We have
been unable to support a market that was very heavily into our
business plan, and the situation could likely cause a closure
of the facility if the ban is lifted impacting employment both
in our United States station and in Europe.''
ARSA therefore urges that since the TSA has demonstrated
significant progress in crafting new security rules, and
because of the security practices already in place in the
industry, Congress should lift the ban on new foreign repair
station certificates and remove this impediment to U.S.
companies competing abroad.
Thank you, Chairwoman Jackson Lee, for the opportunity to
participate. I look forward to answering any questions you may
have.
[The statement of Mr. Klein follows:]

Prepared Statement of Christian A. Klein
November 18, 2009

Thank you, Chairwoman Jackson Lee and Ranking Member Dent. It is a
pleasure and privilege to appear before the subcommittee today on
behalf of the Aeronautical Repair Station Association (ARSA) to discuss
the question of foreign repair station security.
ARSA believes that the answer to the fundamental question posed by
this hearing is that, yes, the flying public is protected and does not
face any unusual or heightened security risk due to foreign or domestic
repair stations. Even in the absence of the long-awaited Transportation
Security Administration (TSA) repair station security rules, existing
Government regulations, industry practices, and the strong interest
repair stations have in ensuring the airworthiness of their work and
protecting their customers' property create a high level of safety and
security.
As the TSA rulemaking process moves forward, the subcommittee
should work with the agency to ensure that the new rules do not a take
a ``one size fits all'' approach to repair station security.
Additionally, the agency must not impose new and unnecessary costs on
the thousands of small U.S. aviation maintenance companies and thereby
undermine the competitiveness of a vibrant sector of the U.S. economy.

OVERVIEW

ARSA is a 500 member-strong international trade association with a
distinguished 25-year record of representing certificated aviation
maintenance facilities before Congress, the Federal Aviation
Administration (FAA), the European Aviation Safety Agency (EASA), and
other civil aviation authorities (CAAs).
ARSA's primary members are companies holding repair station
certificates issued by the FAA under part 145 of Title 14 of the Code
of Federal Regulations, informally referred to as the Federal Aviation
Regulations (FARs). These certificates are our industry's ``license to
do business.'' They authorize companies to perform maintenance and
alterations on civil aviation articles, including aircraft, engines,
and propellers, and on components installed on these products. Repair
stations perform maintenance for airlines, as well as for general
aviation owners and operators.
In addition to its advocacy efforts on behalf of the industry, ARSA
has a strong commitment to regulatory compliance and industry
education. Among other things, our association conducts regulatory
training courses for aviation industry professionals, provides
compliance materials (such as our Model Repair Station Manual), and
staffs a hotline to answer member questions about aviation regulations.
The repair station industry is a vibrant part of the U.S. and world
economies. A recent study by AeroStrategy for ARSA determined that
spending in the global maintenance, repair, and overhaul (MRO) market
exceeded $50 billion in 2008, with North America (the United States and
Canada) accounting for $19.4 billion of the total. When induced and
related economic effects are considered, the industry's impact on the
U.S. economy is $39 billion per year. The 4,122 repair stations in the
United States--85 percent of which are small and medium-size
companies--collectively employ more than 196,000 individuals.
The United States also has a strong and favorable balance of trade
in the aviation maintenance services market. AeroStrategy determined
that North America is a major net exporter of aviation maintenance
services, enjoying a $2.4 billion positive balance of trade in this
arena. While North America is a slight net importer of heavy airframe
maintenance services, it has $1.4 billion and $1.2 billion trade
surpluses in the engine and component maintenance services markets,
respectively. The U.S. competitive advantage in these two areas has
important economic benefits because $1 of spending on airframe heavy
maintenance generates just $1.38 in additional monetary activity, while
a dollar spent on engine and component maintenance services generates
$1.85 and $1.67, respectively.
The following are the key themes of our testimony before the
subcommittee today:
Foreign repair stations are an essential element of the
global aviation system. Without them there would be no
international air travel or commerce.
Despite the fact that TSA has yet to issue the repair
station security regulations mandated by VISION 100, security
standards do exist for repair stations based on their location.
Such standards emanate from the FAA, TSA regulations, and the
International Civil Aviation Organization (ICAO).
Repair station security is not only dependent on Government
oversight. In the aviation maintenance industry, ``good
security is good business.'' Repair stations have a strong
pecuniary interest (not to mention a legal responsibility) in
protecting their customers' property from theft and improper
access, just as they have both a regulatory obligation and
business interest to ensure the airworthiness of their
maintenance work.
A one-size-fits-all approach to repair station security is
not the solution to perceived risks. Aviation maintenance is
conducted in a wide variety of settings, ranging from heavy
airframe work at large facilities on airports to component work
in industrial parks many miles from airports. Risk may vary by
location and the type of maintenance work being performed. As
TSA works to develop the new regulations, the subcommittee must
monitor the process and ensure that small businesses around the
country are not unfairly burdened with new regulatory
obligations that drive up costs with no added public benefit.
Requiring TSA to artificially speed up the rulemaking
process threatens to divert the agency's limited oversight
resources from areas where the threat is greatest and could
result in a poorly-crafted rule.
Punishing private companies for TSA's inaction on the repair
station security front sets a dangerous precedent and is unfair
to the industry.
foreign repair stations are critical to international aviation commerce
Foreign repair stations are an integral part of the international
aviation system. U.S. and foreign airlines, charter companies, and
general aviation operators, as well as aircraft manufacturers located
around the world depend on maintenance facilities for everything from
repairing aircraft and components to supporting supply chains. Aircraft
manufacturers and maintenance companies establish overseas repair
stations to service international customers and U.S.-based air carriers
(airlines, charter companies, and general aviation) operating
internationally.
To operate in the civil aviation maintenance industry, certificated
repair stations must demonstrate to the FAA, or other CAAs if
applicable, that they possess the housing, facilities, equipment,
trained personnel, technical data, and quality systems necessary to
perform work in an airworthy manner. Based upon satisfactory showings
in these areas, a repair station is rated to perform certain types of
maintenance or alteration. Both U.S. and foreign repair stations are
overseen and audited by the FAA, other CAAs, airline customers, and
third-party auditing organizations, as well as the repair station's own
quality assurance staff.
Regardless of the location of the repair facility, the regulatory
requirements are the same. Each item goes through a series of checks
required by FAA and other civil aviation authority regulation before
being placed on an aircraft. (Indeed, this system of checks by the
maintenance providers and airline customers itself acts as a further
protection against security risks and ensures that it is highly
unlikely that any intentional act of sabotage would go unnoticed.)
Not all repair stations look alike and their capabilities vary
significantly. Some provide line maintenance--the routine, day-to-day
work necessary to keep an aircraft or an airline's fleet operating
safely. Some perform substantial maintenance, which includes more
comprehensive inspection and repairs on airframes and overhauls of
aircraft engines. Others offer specialized services for their customers
such as welding, heat treating, and coating on a variety of aircraft
parts. However, the vast majority of repair stations perform
maintenance on components (e.g., landing gear, radios, avionics, etc.)
Component maintenance usually occurs off the aircraft, typically away
from an airport in industrial parks and similar facilities.
The International Convention on Civil Aviation (i.e., the Chicago
Convention) of 1944 and ICAO standards require that the State of
Registry (i.e., the country in which an aircraft is registered) oversee
the maintenance performed on that aircraft and related components,
regardless of where the work is performed. Consequently, maintenance on
a U.S. registered aircraft must be performed by an FAA-certificated
maintenance provider. Similarly, when an aircraft of foreign registry
requires maintenance (e.g., while in the United States), only a repair
station certificated or validated by the aircraft's CAA of registry may
perform the work. For example, only an EASA-certificated repair station
may perform maintenance on an aircraft of French registry.
Limiting the use of appropriately certificated repair stations
overseas would make international travel and commerce difficult because
aircraft always need some level of maintenance when they land at their
destination. In other words, if there were no foreign FAA-certificated
repair stations, U.S. air carriers would effectively be unable to
operate internationally. The economic ramifications of this prohibition
on the U.S. aviation industry are too obvious and vast to discuss in
this statement.
It is for all the foregoing practical, legal, and economic reasons
that ARSA opposes any restrictions on the use of FAA-certificated
foreign repair stations by U.S. operators and air carriers. If new
restrictions are imposed, foreign authorities will retaliate against
the U.S. industry. For example, the United States and the European
Union (EU) are on the verge of concluding a new bilateral aviation
safety agreement (BASA) that deals directly with the reciprocal
certification of aviation maintenance facilities. Restrictions on the
certification and use of foreign repair stations could cause the BASA
to collapse and threaten years of work by FAA, State Department, and
EASA negotiators to craft the new international agreement to allow U.S.
companies easier access to European customers. The collapse of the
U.S.-EU BASA would have devastating consequences for the 1,237 U.S.
repair stations approved by EASA to perform maintenance on EU-
registered aircraft and related components. Indeed, in response to a
recent ARSA member survey, more than 60 percent of respondents said
that the collapse of the BASA and resulting costs and complexities
would have either a ``major'' or ``devastating'' impact on their
companies, and 18 percent said it would threaten their ability to stay
in business. This would significantly threaten the positive balance of
trade (referenced above) that the United States enjoys in aviation
maintenance services.
The past decade has seen an increase in the use of contract
maintenance providers and maintenance facilities located abroad. This
same period has also seen U.S. commercial aviation enjoy its safest
period ever. At a minimum, this correlation suggests that the increased
use of foreign and domestic repair stations is not negatively impacting
aviation safety.

EVEN IN THE ABSENCE OF NEW TSA RULES, EXISTING STANDARDS ENSURE A HIGH
LEVEL OF SECURITY AT REPAIR STATIONS IN THE UNITED STATES AND ABROAD

The absence of a formal TSA repair station security rule has not
created a security vacuum in the aviation maintenance industry. The
basic nature of the aviation industry demands that safety and security
be the top priorities for our member companies. Operators and airlines
will simply not do business with companies that put their passengers
and valuable business assets (i.e., aircraft) at risk. Put simply, for
ARSA members, good safety and security are good business.
In the United States, repair stations located on a commercial
airport are required to subject personnel to criminal background checks
pursuant to TSA regulations when the employees have unescorted access
to the designated airport security identification display area (SIDA).
Therefore, a repair station employee that performs line maintenance for
an air carrier has the same 10-year criminal background check
requirement as an airline mechanic.
Internationally, each country must implement security procedures
based on ICAO Annex 17 standards, which means that rules similar to
TSA's SIDA regulations are in place around the world. At a minimum,
ICAO requires:
A National civil aviation security program with continuous
threat monitoring and mandatory quality control procedures;
Airport security programs for each airport serving
international carriers;
Air operator security programs;
Background checks for persons implementing security control
measures and persons with unescorted access to restricted
security areas; and
Periodic ICAO security audits.
However, many repair stations are located miles away from airports
and perform specialized work on component parts. These companies may
not be subject to SIDA requirements, but that does not mean they do not
have security procedures in place to protect their customers' property
and their employees. As part of its model regulatory compliance manual
for repair stations, ARSA recommends the following as best security
practices for the industry:
The facility should be monitored by an electronic security
device and secured by deadbolts and locks.
Only current employees should be provided with keys, and
those keys should be retrieved upon termination or change of
employment. If the keys are not retrieved, the locks and
deadlocks should be changed.
There should be adequate lighting around the perimeter of
the building.
Customers and other persons that are not employed by the
repair station should be escorted when provided access to areas
of the company where maintenance, preventive maintenance, or
alteration activities are performed.
The results of an ARSA member survey conducted last week further
illustrate the extent to which security practices are widely employed
by U.S. and foreign repair stations even in the absence of TSA rules. A
majority of the survey respondents reported having the following
security practices in place:
Limited access through a single locked entrance;
Criminal background checks on new employees;
Prohibition on unescorted visitors;
Customer products kept in segregated, locked/limited access
area;
Security alarm;
Visitor sign-in log;
Perimeter fencing;
Locked doors.
Many ARSA members also require employees to wear badges and have
video cameras installed to monitor the premises. Of course, all the
foregoing security practices are in addition to laws and regulations
applicable to all U.S. employers requiring citizenship verification for
new hires and, for repair stations working on air carrier aircraft,
random drug testing.
It is significant that none of the ARSA survey respondents reported
having a security breach in the past 2 years that, if undetected, would
have compromised the airworthiness of the products the company was
working on at the time. The survey results are highly reliable and have
a margin of error of just 8 percent for the entire population of U.S.
FAA part 145 certificate holders. While this does not by itself prove
that security is not a problem, at a minimum it suggests that the
industry's current security practices are working.
In sum, aviation safety and security do not begin and end with the
TSA, FAA, or any other regulatory body. Government inspectors will
never be able to oversee every facility or employee all the time. The
industry has clearly recognized that it has the ultimate obligation to
ensure that the civil aviation system is secure. All evidence suggests
that it is fulfilling that responsibility even in the absence of the
long-awaited repair station security regulation.
tsa rules must not take ``one size fits all'' approach to security and

THE SMALL BUSINESS-DOMINATED AVIATION MAINTENANCE INDUSTRY MUST HAVE
ADEQUATE TIME TO REVIEW AND COMMENT

The majority of entities that will be impacted by the TSA repair
station security rule are small businesses. The laws adopted to govern
the rulemaking process, namely the Administrative Procedure Act and the
Regulatory Flexibility Act, are designed to protect the Nation's small
businesses from onerous and excessively burdensome regulations.
However, by rushing the rulemaking, Congress threatens to deny affected
companies the opportunity to fully comment, which could have
devastating consequences for repair stations and their employees.
Additionally, as described above, the aviation maintenance industry is
very diverse. A ``one size fits all'' rule would inevitability impose
unnecessary regulatory burdens and costs on small businesses.
Understanding the varying degrees of access to aircraft and sensitive
areas, the location of facilities, and additional factors is essential
to crafting a rule that targets the areas that pose the greatest
security risk.
With the foregoing complexities of the repair station industry in
mind, in order to ensure that the TSA's new security regulation
achieves the goals intended by Congress, affected parties must have
adequate time to comment. However, by mandating the August 3, 2008
``due date,'' the law effectively gave the TSA and industry two bad
options: Support a hurried rulemaking to avoid penalty or ensure a
deliberate rulemaking process but risk missing the mandated due date.
This far-reaching rule requires adequate time for TSA deliberation,
industry comment and agency response. It is better to do the process
right rather than fast.
ARSA appreciates Congress' frustration with the fact that TSA has
not yet issued its repair station security rule. However, we attribute
this delay at least partially to the agency's desire to direct its
scarce resources at the areas that pose the greatest risk to the
traveling public. Forcing TSA to direct its attention to a segment of
the aviation industry where there is no demonstrated safety risk means
that the agency has fewer resources to focus on high-risk areas. By
forcing the reallocation of resources in this manner, Congress could
inadvertently make travel less safe.
In testimony before the Senate Committee on Commerce, Science, and
Transportation on Oct. 16, 2007, former TSA Administrator Kip Hawley
discussed several of the initiatives TSA was pursing to increase safety
across transportation modes ranging from highways and rail to aviation
and cargo shipments. During the hearing, Hawley testified that the TSA
currently is committed to focusing its resources on ``high priority
items'' facing National security interests and said that the agency
must be allowed to act on its risk determinations. Administrator Hawley
stated in his written testimony that:

``[M]any of the rulemaking requirements mandated in the 9/11 Act do not
adequately recognize the obligations that TSA must give the many
stakeholders affected by proposed regulations and the general public .
. . These requirements are time consuming but are time well spent to
assure that our regulations achieve their objective in a way that is
transparent to stakeholders and the public and does not adversely
affect travel and commerce.''

INDUSTRY SHOULD NOT BE PUNISHED FOR AGENCY INACTION

Despite the full cooperation of industry, the TSA has failed to
promulgate a final rule in a timely manner. However, rather than
punishing TSA, Congress is instead punishing the aviation maintenance
industry with a ``freeze'' on initial certification of foreign repair
stations. The ban is having a significant impact on the ability of
American companies to expand and service international markets. As one
respondent to ARSA's recent member survey stated, ``We were very close
to complete with licensing our source and were just performing the
demonstration phase of the EASA certificate at the time of the
moratorium. We have been unable to support a market that was very
heavily into our business plan and the situation could likely cause
closure of the facility if the ban isn't lifted impacting employment
both in our United States Station and Europe.''
Punishing industry for the failure of an Executive agency to act
sets a dangerous precedent. U.S. aviation industry companies and the
thousands they employ do not have the power to compel TSA to issue the
repair station security final rule, yet they pay the price for the
agency's inaction.

CONCLUSION

In sum, even without the new TSA repair station security rules,
foreign and domestic repair stations are safe. Existing domestic and
international laws and regulations, customer requirements, company
policies, and industry best practices ensure that security is a
priority at repair stations throughout the world.
ARSA looks forward to working with TSA and the members of this
panel to craft new rules that improve repair station security. However,
as the rulemaking process moves forward, both Congress and TSA must be
mindful of the diverse nature of the aviation maintenance industry and
the fact a ``one size fits all'' approach to security will not be
successful. Congress must give TSA adequate time to consider the impact
that the rules will have on the small business-dominated aviation
maintenance industry and ensure that the regulations will not undermine
the competitiveness of a thriving sector of the U.S. economy.
In the end, no Government or agency can by itself ensure aviation
safety and security. Both depend on a commitment from aviation industry
companies and their employees who are operating the system on a day-to-
day basis. In the same way that ARSA works with civil aviation
authorities around the world to improve the quality of regulation and
oversight, so too will we continue to work with our domestic and
foreign members to improve safety and security practices.
Chairwoman Jackson Lee, thank you again for the opportunity to
participate in this hearing. I look forward to answering whatever
questions you and the Members of your subcommittee have.

APPENDIX A.--FAA REPAIR STATIONS BY STATE (INCLUDING TERRITORIES)
Prepared by the Aeronautical Repair Station Association (ARSA) Based on FAA Air Agency Data Dated 11/09/09
----------------------------------------------------------------------------------------------------------------
Number of Repair
State Stations Number of Employees
----------------------------------------------------------------------------------------------------------------
AK............................................................ 52 482
AL............................................................ 57 5,760
AR............................................................ 45 3,334
AZ............................................................ 143 5,460
CA............................................................ 651 30,597
CO............................................................ 69 1,136
CT............................................................ 99 7,330
DC............................................................ 1 6
DE............................................................ 7 952
FL............................................................ 508 16,290
GA............................................................ 118 10,599
GU............................................................ 1 6
HI............................................................ 13 141
IA............................................................ 35 3,006
ID............................................................ 29 484
IL............................................................ 104 4,057
IN............................................................ 67 2,976
KS............................................................ 111 6,372
KY............................................................ 37 728
LA............................................................ 37 2,096
MA............................................................ 56 1,743
MD............................................................ 25 1,445
ME............................................................ 13 864
MI............................................................ 113 4,044
MN............................................................ 55 2,091
MO............................................................ 52 2,022
MS............................................................ 20 834
MT............................................................ 22 315
NC............................................................ 70 2,930
ND............................................................ 13 199
NE............................................................ 13 1,365
NH............................................................ 23 569
NJ............................................................ 65 2,763
NM............................................................ 20 465
NV............................................................ 28 689
NY............................................................ 121 5,781
OH............................................................ 129 4,774
OK............................................................ 140 12,989
OR............................................................ 49 1,536
PA............................................................ 93 2,702
PR............................................................ 14 121
RI............................................................ 7 294
SC............................................................ 36 2,331
SD............................................................ 15 66
TN............................................................ 55 2,018
TX............................................................ 419 25,688
UT............................................................ 28 331
VA............................................................ 45 1,191
VI............................................................ 1 1
VT............................................................ 11 154
WA............................................................ 114 9,038
WI............................................................ 48 1,648
WV............................................................ 15 1,460
WY............................................................ 10 82
-------------------------------------------------
Total................................................... 4,122 196,355
----------------------------------------------------------------------------------------------------------------

Ms. Jackson Lee. Let me thank the witnesses for their
thoughtful testimony and emphasize again the importance of
Congress both being an entity for oversight, and as well, to
correct what we see has a detrimental impact on securing of the
homeland.
I might say in response to witnesses' testimony that the
status of FAA certification was a bipartisan decision made in
2007 during the Bush administration. So I hope that we can
establish that this is a bipartisan desire to ensure the
security of this Nation.
With that, let me begin my questioning with Mr. Roach and
Mr. Gless and Mr. Moore.
I would like your perspective on the overall differences
between security protocols at foreign repair stations compared
to security systems we have here in the United States, some of
which you have heard from your fellow colleagues, or some you
may have first-hand knowledge.
Mr. Roach, what is the difference security protocols you
think are here versus in foreign repair stations?
Mr. Roach. In the United States, the people that work with
aircraft are subject to very strict background checks. There
are--excuse me. They are treated--people who work with aircraft
are treated just as an worker at an airport, background checks,
drug and alcohol testing, so you will never have somebody who--
a known terrorist to be working in a facility within the United
States.
In addition, we believe that it is a security fact that
they hire people that really don't have much knowledge about
aircraft who can work on aircraft without being able to read
logbooks or read the maintenance manuals.
So we think that there is a distinct difference between
what happens here in the United States versus what happens
every place else and without the inspections that we are
subject to, surprise inspections, one really does not know what
happens over there because when you have an inspection that you
have to tell somebody 60 days ahead of time that you are
coming, then a lot of things can happen and for a short period
of time and though once the inspectors leave, if and when they
can get there, then they go back to business as usual.
Ms. Jackson Lee. Thank you, Mr. Roach.
Mr. Gless. On any given day on our largest maintenance base
being the one in Tulsa, Oklahoma, we could turn around and have
a fleet of FAA inspectors show up, come in and dig through
everything from a simple piece of paperwork to the actual work
being done.
On any given day, my individuals working on the fields and
on the airports and in the hangers are confronted by Customs,
TSA, Homeland Security, any of the different individuals
checking security. They must wear their badges. Their
background checks go in some locations until their 16th
birthday.
Those checks are not being accomplished in other places.
There may be a few out there that are now looking into it. Some
of the airlines that are contracting out are starting to
mandate it as, you know, some of the brothers have said, but it
is not the norm that takes place here every day.
The individuals are required to have these credentials.
They are required to have the knowledge and understanding to
read the manuals like has been stated, and they are watched
daily.
The individual overseas in these other locations, as was
said, they have to notify them prior to inspection, and we know
how that goes. When someone tells you they are coming to look
at something, you prepare for it. We are treated differently
here in this county than they are treated overseas, and you
know, just the security and the background and the covering of
the employees is not equal.
Ms. Jackson Lee. So workers that you represent are those
that are working for one particular airline?
Mr. Gless. The large bulk of my employees, we have them in
multiples but the large bulk of them are at American Airlines.
We are the last larger major in-sourcing airline left.
Ms. Jackson Lee. So even on domestic soil, American
Airlines at this point is not using contractual repair shops?
Mr. Gless. We use for certain items, of course, you know,
not everything is built inside. There are things that have to
be sent out. We have a joint venture with Rolls Royce where my
mechanics work on the Rolls Royce engines of other aircraft.
That is shown as contracting out. They are my mechanics,
Rolls Royce's facility, but it is still viewed as a contracting
out. So as it was said by another panelist that everybody does
some level of contracting out, yes, everybody has to send
something out at some point. But we primarily do all of our
heavy maintenance in-house.
Ms. Jackson Lee. The contracting out that is done and most
of the people you are--not your workers?
Mr. Gless. The contracting outside of our joint ventures,
yes, they are done with other facilities in other locations and
other companies.
Ms. Jackson Lee. Mr. Moore. Do you remember the question,
what is the difference between the security protocols in
domestically and then overseas to your knowledge?
Mr. Moore. Yes, and I concur with both of the gentlemen
here and I won't repeat their testimony. I will speak to the
facility itself.
I can do a compare and contrast as I read in my testimony
about what I saw in El Salvador. You fly out of IAH, I am sure,
occasionally. When I talked about the electronic badge readers,
if you swipe a badge to get on the property at IAH and your
badge is not active at that time or it has been suspended for
any reason, and you will have the Houston Airport Authority at
that gate within minutes.
You have a huge visibility with Homeland Security and TSA
all over the facility no matter where you go, whether they
are--if you are driving across the airport you are going to see
Homeland Security. You are going to see TSA.
I go back to the perimeter fencing as there is a--I believe
it is 10-foot rule--and don't quote me on that, but I believe
at one point we were told we had to move all of our equipment
that far back from either side of the fence, so those are some
of the things that I see along with what these gentlemen spoke
to.
But again, I mean, you have much more stringent controls in
the United States. Another good example, just for a mechanic to
go upstairs for lunch, TSA may have a random checkpoint set up
at the top of the elevator on what you are bringing into the
terminal even you are on duty. So those are the kinds of
security protocols and measures that we have in place.
Ms. Jackson Lee. Thank you.
Mr. Barimo, you can sense the line of my questioning is
with the full recognition of the asset that this industry
represents, repair stations, domestic repair stations, foreign
repair stations and the attentiveness in which airlines address
these crucial issues.
However, the issue of security and securing the homeland is
not a predictable job. Incidences of terrorism, unfortunately,
are not predictable and it causes one to have to be prepared
all the time.
So the question goes to you in terms of the distinction in
the security protocols that you may have or your companies,
your members, may have in the United States versus in the
foreign repair. Comment on the fact that there has to be notice
given for, if you will, inspections versus the spot checks that
are going on here in the United States.
Mr. Barimo. Thank you, Madame Chairwoman. I--let me first
say that we support surprise inspections. We think they are
very effective, and we believe that there is a way to conduct
those inspections in a way that doesn't compromise security. We
are looking forward to having TSA and FAA work together to
develop ways to do that.
It is certainly a great idea. We understand some of the
challenges in conducting some of those surprise audits. We
think those challenges can certainly be overcome, and we think
as part of the rulemaking process we will see that happen.
Regarding the security aspect and the differences
domestically versus foreign facilities, we have to keep in mind
that we are talking about facilities--at least when we are
talking about ATA member airlines using facilities abroad, we
are talking about large airports that have security
requirements that conform to ICAO, the international standards.
So there is a standard out there for security. It is driven
by an ICAO guideline and these MROs, these repair stations,
that are located on an airport are subject to the same
requirements. So there are, in fact, background checks and
other requirements in place for facilities that, in fact, are
located at an airport.
Ms. Jackson Lee. You are talking about foreign repair
stations?
Mr. Barimo. Yes.
Ms. Jackson Lee. That are located at an airport?
Mr. Barimo. Yes.
Ms. Jackson Lee. What protocol are you speaking of? Is it
based on the foreign country's protocol or based on TSA's or
U.S. protocol?
Mr. Barimo. It is based in the international standard
protocol that is driven by ICAO up to the individual countries
to implement those protocols and----
Ms. Jackson Lee. It is optional.
Mr. Barimo. No, it is not optional and I will--if I may,
let me defer to Christian. He is well-versed in this area.
Mr. Klein. Or between the two of us, right? The answer is
that I believe it is any signatory to the Chicago Convention
which is the international treaty that created ICAO--would have
to--if they didn't accept Annex 17, which was the one that
implements or mandates these security standards at
international airports, they would have to file an exemption
with ICAO. So we would be on notice who doesn't have the higher
security regulations.
Also if I can just go back to one point, this question of
the surprise inspections, to try to alleviate some of your
concern there. You know, when you can--if you have notice of an
inspection, you can certainly sweep the floors. You maybe put a
fresh coat of paint up on the walls, but the reality is if the
FAA is going in and looking at systematic deficiencies at an
organization, systematic security deficiencies, systematic
safety deficiencies. That is not something you can cover up in,
you know, 30 days.
That is something that is going to be evident in the way
the work is being done. Also, again, just a reminder here, it
is not just the FAA that is overseeing these foreign
facilities. There are literally scores of audits happening
every year at foreign Part 145 certificate holders.
It is not just the FAA. It is the other civil aviation
authorities that supervise the other repair station
certificates that facilities might have. It is the airlines
that are going in and actually conducting audits, and it is
third-party audit organizations.
Then any repair station that is doing work air carrier
aircraft also has to have a quality assurance system in place
that has to have its own auditors in place. So again, it is not
just a matter of the FAA coming in and conducting surprise
inspections. It is also, again, there are multiple layers of
inspection happening at these foreign facilities.
Ms. Jackson Lee. Included in the international agreement,
are there requirements for background checks? Can you detail
what occurs?
Mr. Klein. I am not an expert, unfortunately, on ICAO Annex
17. It is my understanding that they are, but I can't
absolutely confirm that, unfortunately.
Ms. Jackson Lee. Do you not think it is important for the
United States to have a framework that has a consistent
approach to reviewing the backgrounds of individuals who are
working on airplanes that American passengers, and others, are
utilizing to travel to the United States?
Mr. Klein. You mean, the TSA, what the TSA is basically
proposing as a design here? Or beyond what the TSA is talking
about doing?
Ms. Jackson Lee. Just leave out agencies and should we, the
United States, have a security scheme that addresses the
questions of foreign repair stations to protect Americans who
are traveling on these airplanes?
Mr. Klein. I certainly think that there is, you know, that
consistency from place is an important goal. You know, one of
the things you get into obviously are issues of sovereignty,
but to the extent that, you know, we can coordinate
internationally and have common standards, absolutely, I think
that should be a goal.
Ms. Jackson Lee. Well, when you finally gave a yes, which
is that we do need to have a structure on security that is
consistent which is what I think----
Mr. Klein. Well, absolutely.
Ms. Jackson Lee [continuing]. We are attempting to secure
during this hearing. Outsourcing of foreign repair stations has
increased over the decade. To the witnesses do they think this
trend is going to increase or level off? What is the trend for
our domestic repair stations? Can they maintain their presence
and volume of work in the face of increasing outsourcing trend?
Mr. Roach.
Mr. Roach. Well, if nothing else changed, yes, more work
will be going overseas. Like I indicated previously, the most
modern, efficient facility in the United States in
Indianapolis, was closed. Then United Airlines fly 777 aircraft
to China to be repaired.
So these trends, because they can cut the cost of
maintaining these aircraft, they are going to continue to fly
those planes. Now, United Airlines used to employ some 14,000
mechanics. They employ now 4,000 or 5,000 mechanics. The
numbers keep going down.
The same thing with Continental Airlines, the mechanic
numbers were once twice as high as they are today. US Airways,
a lot of work is being subcontracted out and the level of
employment in this country has gone down.
The people who used to fix and maintain aircraft in this
country are decreasing while more work is going overseas to
people, again, who cannot read and write English, who cannot
read the maintenance manuals. That is a safety and security
hazard within itself that somebody is working on an aircraft
that can't read or write English, and therefore, somebody else
has interpret what they are supposed to do.
In terms of security, nobody cares, and that is the bottom
line. They keep saying, well, it is for this reason and that
reason, there is no uniform policy or background checks. There
are no uniform policies on drug and alcohol testing. There are
no uniform policies on anything and anything that happens.
Let me just say one other point, is that aircraft today are
built much better than they were years ago. What happens is
these aircraft come back with a little defect here, a little
defect there, and they can continue to fly because these
aircraft were built in such a high-tech way that they are okay.
There comes a point in time that as these aircraft with
these defects, these small items continue to build up, we are
headed for a catastrophe because as these aircraft get older
and they continue to fly these planes overseas without the
safeguards that we have been talking about this afternoon,
little defects keep creeping up on these aircraft.
Luckily, because some of them have been detected by
mechanics when these planes are back in service--such as US
Air--US Airlines aircraft that were back in service when our
mechanics were able to detect these defaults, but it cannot
continue to go in the long term. Sooner or later, we will pay
the price.
Ms. Jackson Lee. Mr. Gless.
Thank you, Mr. Roach.
Mr. Gless. Could you repeat the question again?
Ms. Jackson Lee. The question is regarding the utilization
of domestic repair places and foreign repair. Do you think they
are going to increase? Is there going to be continued
outsourcing? How do you see the future?
Mr. Gless. Well, the future, I mean, we speaking from where
I come from, you know, we are on an in-sourcing kick. We are
trying to show that we can do it in-house. We have a better
product that we are able to keep control of. We don't have to
wait for somebody else to give us our aircraft back. We have
efficiencies in place, and we have actually jointly together
figured out ways to do it faster and better than the
outsourcers.
Right now, unfortunately, there is a trend of all of the
airlines--as we race to the bottom, as we call it--to
outsource. It is a cheaper way for people to not worry and it
comes down to people. They are removing their people problem.
They are going to a pay problem. They are just going to take
their aircraft, ship it overseas and pay someone else and not
worry about it.
We would like to see more in-house. With the constricting
of the airline industry right now, I believe there is more
facilities than aircrafts to be repaired so there is a race to
the bottom again for cheaper maintenance.
That is even within this county. There are companies out
there who are looking to do it cheaper and cheaper to get the
work in. As long as somebody offers a product for cheaper and
gives a product that will make their flight from A to B, it
doesn't matter if there is as Mr. Roach says, you know, some
small flaws as it comes out of check. There are redundancies in
the systems to make sure the aircraft can continue on.
So as long as, you know, the outsourcing continues and the
cheaper fare is more important than the quality, the
outsourcing will continue.
Ms. Jackson Lee. Do your employees go overseas to work on
planes on behalf of your company or the company that you work
for?
Mr. Gless. There are locations where we would ferry
aircraft, where there is an aircraft down where there is not
people. We have unionized workers in Europe who work for
American Airlines who work on the aircraft. We have workers in
South America and locations----
Ms. Jackson Lee. But they are American Airlines employees.
Mr. Gless. They are American Airlines employees. They are--
--
Ms. Jackson Lee. So it is not outsourced, so they have a--
--
Mr. Gless [continuing]. But there are some locations where
there is contract maintenance as it was stated. You can't have
people in every location of the world. But primarily they are
American Airlines employees in these locations.
Ms. Jackson Lee. Are they background-checked?
Mr. Gless. They are through the company.
Ms. Jackson Lee. Mr. Moore.
Mr. Moore. The simple answer is yes. I believe, as long as
this is a bottom-line driven industry, the race to reduce costs
will continue. Unfortunately, and my feeling, and I have said
this before is until we dig a big smoking hole in the ground,
it is going to continue. Unless it is directly attributed to
something that happened at an outstation, or excuse me, at a
foreign repair station or a repair station, again, the
statistics will hold as Mr. Barimo said.
But think of this. Mr. Roach brought a point up about the
facility up there in Indianapolis. So you have outsourcing,
right? So now you have a repair station in there where United
used to work--same guys working on United's airplanes.
But because they can't find enough skilled labor, they
actually contract again. So you have got airline contracting to
a vendor who is now contracting to a labor supplier. So the
chain keeps getting diluted.
If you understand what I said earlier about the layer upon
layer being taken away, this is what I am talking about. You
keep looking for ways to go even further or closer to the edge
and that is the fear.
But yes, as long as this industry is bottom-line driven,
they will continue to find ways to outsource more maintenance.
Ms. Jackson Lee. Mr. Barimo, why don't you comment and Mr.
Klein on this increasing inclination to outsource repair both
domestically but in particular this hearing is on foreign
repair. Is that what is the bulk of the structure for airlines
is the outsourcing on foreign soil?
Mr. Barimo. Madame Chairwoman, what I would say is that the
domestic trend has been increasing. It has been centered around
aircraft heavy maintenance checks and it has stabilized in
the--depending on how you measure it, in the 40 percent to 50
percent range.
We think it will continue to creep up slowly but will
remain in the 40 percent to 60 percent range for the
foreseeable future. Regarding jobs----
Ms. Jackson Lee. Wait--a 60 percent outsource?
Mr. Barimo. Yes, based on total dollars spent. We are
around 40 percent, 45 percent today. Regarding jobs going
overseas, I would point out that other countries have
recognized the value of the MRO business to their economy.
We believe that there is an opportunity here in the United
States to reinvigorate the MRO industry. We have no shortage of
skilled people across the United States, many displaced auto
workers that would love to enter into a thriving industry that
in fact attracts more work to the United States and grow that
industry.
There are opportunities. There are facilities that could be
modernized. We can retrain individuals. We can invest in some
new technologies that would make us more competitive in that
industry. So there are opportunities to in fact to grow that
positive balance of trade beyond where it is today.
Then finally I would just, you know, I feel obligated to
counter something that Mr. Roach said and it was about small
defects being tolerated on airplanes and it will eventually
bite us.
What I would point to is another chart in my testimony, and
again, I want to take us back to data, if we look at mechanical
reliability for airplanes, and I acknowledge that they are
complex pieces of machinery. They are much more reliable than
they historically were decades ago.
But today we see reliability levels, mechanical reliability
levels at the highest level we have ever seen. So something is
happening that is right in the maintenance world and it is
indicated not just by the absence of accidents, but by the
reliability data.
Ms. Jackson Lee. Let me ask the question. Are you, Mr.
Klein, do you see outsourcing increasing and particularly with
respect to the foreign repair stations?
Mr. Klein. I think it will. A couple points, first of all,
you know, the way we look at contract maintenance is that
contract maintenance is helping airlines become more
competitive. Airlines--the contract maintenance companies,
quite frankly, get better returns on their investment in
training and equipment and facilities et cetera than airlines
can get because these repair stations are specialized companies
that do specialized types of work.
So the way we look at it is that these airlines are
contracting out work that is helping the airlines reduce costs
so they can be more efficient. Yes, it is cheaper but cheaper
doesn't necessarily mean it is worse.
They are able to see efficiency gains, reduce costs, and
make themselves more competitive which means that there are
going to be pilot jobs, flight attendant jobs, mechanic jobs in
the future at those airlines because those airlines will
survive as they become more competitive.
I would also point out that, I mean, we hope that the
outsourcing trend is consistent because contract maintenance
makes a huge contribution to the U.S. economy. As I said
earlier, we have a $2.4 billion balance, positive balance of
trade in the market for contract maintenance services.
So for, you know, for Air France, a U.S. repair station in
Houston is a foreign repair station. So, you know, again, yes,
we are sending some work overseas but the reality is that we
are keeping a lot more here, and we are getting a lot more here
from the rest of the world and it is a positive balance of
trade.
It is an industry thing--a really positive contribution to
the U.S. economy and growing jobs in small businesses all
around the country. So again, I think that it is a trend that
is here to stay, again, because we are helping airlines we do
serve to improve their efficiency.
Ms. Jackson Lee. Let me ask these final questions and thank
the witnesses and try to frame again that this is homeland
security and the key is securing the Nation. I have listened to
Mr. Barimo and Mr. Klein on the economic aspect and the
goodwill of the airlines, and I agree.
But I started out by saying that terrorism is
unpredictable. Being able to secure a Nation requires this
Nation to be at the top of its game. In the report that I am
looking at, and you listened to the testimony before, it
specifically notes ``FAA needs to improve its system for
determining how much and where outsource maintenance is
performed.''
That is probably a domestic issue but certainly it is an
international issue. That gives me reason for concern that we
have a Federal agency that cannot get their hands around what
is being outsourced.
When we talk about the economy, I think the economy also
deals with how many Americans we can hire. I didn't hear
anything from my two friends indicating that we transport
American workers over to these foreign repair stations,
individuals who have been vetted, who have security clearances,
because that is the question.
The announcement that the senator made about an al Qaeda
person being on site at a Singapore repair station is the kind
of unpredictable action that could be occurring around the
world. So I would indicate and ask for your comment on the FAA
needs to insure carriers and repair stations and have a strong
oversight system--two points--make it clear FAA needs to ensure
carriers and repair stations have strong oversight systems, and
FAA needs to improve the system for determining how much and
where outsource maintenance is.
In your answer--and that is, of course, in the backdrop of
TSA in the midst of its rulemaking. I am prepared to discuss
with TSA as to whether or not they need to narrow the focus on
repair stations that are overseas because Mr. Ellis made a
point--Mr. Klein, excuse me, made a point concerning the impact
it might have on domestic U.S. companies if they had to subject
themselves to burdenous rulemaking.
But the key here is to intertwine the utilization of
already checked American workers with clearances and who we
know have an understanding of the concept of what we are doing
to be working in this field for security purposes versus what I
sense is a unchecked system of foreign repair stations.
So Mr. Roach, would you answer that long question please?
You can summarize in however you desire to do. This is the last
question.
Mr. Roach. Okay. I think you are right on target. I think
that from all the discussions that we have had more work is
going to be sent overseas. Again, we are flying very expensive
aircraft, the Boeing 777 to Red China, so there is no
restriction on where planes go and they could be being
maintained any place in the world.
Anybody can work on them, and I think we briefly read the
rulemaking that was posted in the registry today, and we think
that goes a long way in correcting the problems. But the FAA
needs to have a better control on where maintenance is done.
They need to have a better control on inspections. Do we need
the inspections? We need to know who is working on these
aircraft.
We don't need aircraft that could--things can be put on
these aircraft and flown back to the United States to destroy
the lives of people. We don't need aircraft that is being
maintained in places where they are smuggling cocaine and
heroin back into this country.
So we think they need to know who is working on the plane.
We need to know where they are working on this plane. We need
the background checks that we are required to do. The majority
of the mechanics that are working on aircraft for the United
States airframe and power plant licensed mechanics.
The mechanics or the people that are working on these
aircrafts from foreign countries are just anybody that can get
to work on aircraft. They only need one person to sign the
logbook and everybody else--they can get anybody wandering down
the street to work on aircraft, no background checks.
So I think yes, that we need better oversight, and we need
better control on where these planes go, especially those that
are going to be flown back into the United States and carry
thousands and thousands of people.
Ms. Jackson Lee. Would you be comfortable if the rulemaking
was limited or directed at foreign repair stations in
particular? It is the broad rulemaking now for all stations.
Mr. Roach. We, again, I haven't been able to read it and we
are reading, in the process, and we will comment on that and at
the appropriate time we will take your comments into
consideration.
Ms. Jackson Lee. Mr. Gless.
Mr. Gless. Well, let me start by saying that the workers
here in the United States are monitored. The locations and the
larger facilities outside the small little mom-and-pop shops
that may be working on a coating or something of specific value
to a covering of a table or something like that are monitored.
They are on facilities that are certified by the FAA. They
are on facilities that are inspected regularly by certain, you
know, FAA inspectors. I believe it was Mr. Dalbey from the FAA
stated that they are up to 709 foreign certified stations right
now, 709.
Ms. Jackson Lee. So would you welcome the rulemaking to be
focused on the security conditions in foreign repair stations?
Mr. Gless. Yes, it would be a great start.
Ms. Jackson Lee. Thank you.
Mr. Moore.
Mr. Moore. Yes. Simply, yes. The single standard----
Ms. Jackson Lee. Yes, that the rulemaking focus on foreign
repair stations?
Mr. Moore. Yes.
Ms. Jackson Lee. Thank you.
Mr. Moore. I say that simply because you should have the
same standard. If you work in the United States at registered
aircraft in the United States, why would you expect any
different standards if you were working outside the United
States and it is still the same aircraft. It is still the same
people.
Ms. Jackson Lee. Thank you very much.
Mr. Barimo, excuse me.
Mr. Barimo. Thank you.
Ms. Jackson Lee. I want to call you Barrymore, but I will
not do that again.
Mr. Barimo. You had it right the first time with Barimo.
Ms. Jackson Lee. Okay.
Mr. Barimo. Let me just say, airlines are willing to
provide information about where work is performed to the FAA.
We provide data today. If that needs to change, if the format
of that, if the scope of that needs to change, we are
absolutely willing to support that effort because we agree that
they need to know. We believe that people know within FAA
today. I think it is a matter of them being able to take
advantage of that information.
Regarding the TSA rulemaking, I would say no. I don't think
it is too broad. I think if it is a risk-based rule, that the
risk analysis will focus us where we need to look. If that
focus turns out to be foreign repair stations, then by all
means we focus on foreign repair stations.
But I think it is premature to jump there, and I think we
need to let the experts do the analysis. It is great to have
TSA on board now, and we look forward to working with them to
develop a rule that is effective and does address your
concerns.
Ms. Jackson Lee. So you take some issue with the fact that
it will be too much of a burden to put a general rule out that
impact the domestic and foreign repair stations?
Mr. Barimo. Yes. I think it skips a step and that step is
the risk analysis. I think that has been so critical for us on
the safety side and it has helped us channel our resources to
where they could really be effective and they have been. I
think we need to take the same approach with the security side
and not skip that all-important risk analysis step. We may end
up at the same place, but I think we need to follow the path.
Ms. Jackson Lee. It has come to my attention that not all
countries have signed the international agreement so let me
pose this question: Do you recognize the importance of having
security background checks for individuals in foreign repairs
shops that work on airlines that are headed toward the United
States?
Mr. Barimo. Absolutely.
Ms. Jackson Lee. Mr. Klein, your comment on the idea of
narrowing the focus of the rulemaking and the importance of the
FAA having greater oversight and responsibility for the
security of these foreign--not just the security but the
oversight joined with TSA on the securing of these foreign
repair stations and domestic repair stations.
Mr. Klein. Yes, thank you. A couple of points, first of
all, ARSA has a long history of working very, very closely with
the FAA on regulatory compliance and to try to push out
regulatory compliance information to our members, so we take
this very, very seriously.
In fact, we have been on the record for years as coming to
Congress to beg for more oversight resources for the FAA
because when the FAA doesn't have the money to do its job from
an oversight standpoint, that directly impacts our members'
bottom line.
In fact I reference a survey that we conducted last week.
Thirty percent of our members reported losing business
opportunities because the FAA didn't have the resources to
approve applications and changes to operation specifications
and things like that. So again, FAA resource is absolutely
critical again, and we would certainly support that. On the
question of the extending or limiting the scope of the TSA
rulemaking to small companies, I think----
Ms. Jackson Lee. No, you didn't hear me. Not limiting to
small companies.
Mr. Klein. All right, so foreign repair stations.
Ms. Jackson Lee. Foreign repair.
Mr. Klein. I think if you go back and check Vision 100, as
I recall it was drafted to apply to both foreign and domestic
repair stations. So I don't think it is a question necessarily
for the TSA. I think it is a question that Congress has already
mandated this, that they be applicable to both U.S. and foreign
companies.
I can--I will double--that is my understanding of the law.
I am sorry.
Ms. Jackson Lee. You are now speaking to Congress, so I am
asking your input on whether or not you believe it should be
narrowed to foreign repair stations?
Mr. Klein. Yes, I would----
Ms. Jackson Lee. You are absolutely right. I am just asking
a question, do you think it should be narrowed?
Mr. Klein. I would agree with Basil's comment that if you
have, you know, again, we have to do some risk analysis and see
where the risk is greatest. I mean, I certainly, you know, I am
not saying that we want to impose a bunch of new regulatory
burdens on our small member companies around the country.
I think if the rule is drafted in such a way that it
reflects the realities of the industry, the fact that many of
these are small companies where you have two or three
employees, you know, maybe you don't need to have badging at a
company with two or three employees, that we can craft a rule
that is going to work for everybody.
Ms. Jackson Lee. Do you believe that it is important and
imperative to have background checks for all individuals in
foreign repair stations that are working on airplanes destined
for the United States?
Mr. Klein. I think that it is appropriate to have rules
that are equivalent to the background investigations that we
have here. Again, I mean, it is not every airline employee in
the United States gets background investigations.
As I understand the rule, the STA rules, it is if you
require unescorted access to the aircraft at the ramp, you have
a criminal background investigation through TSA so again,
equivalency, absolutely.
Ms. Jackson Lee. Well, that is why we are in the midst of a
rulemaking. Obviously, if you were in the midst of working on a
aircraft that could be carrying passengers, whether you are in
the area that is on the ramp or near the ramp, you could be in
the repair shop and have the ability to undermine the viability
of an aircraft.
So my question is do you think it is important when
airplanes are repaired on foreign soil, to have those who have
access to that airplane have a background check?
Mr. Klein. If they are doing safety sensitive work and have
unescorted access to the aircraft or the ramp, sure. Are you--I
guess I am not understanding the question. Are you saying
should every single person working at a foreign repair station
have a background check?
Ms. Jackson Lee. That is working on the aircraft.
Mr. Klein. On the aircraft, again, if it is consistent with
the U.S. rules, absolutely.
Ms. Jackson Lee. Well, let me thank you for all of your
testimony and your patience in the questioning. I think this
has been instructive and constructive as it relates to the FAA
and TSA moving forward on, I think, an important loophole that
is growing.
I hope as we have had this discussion with our fine members
from America's workforce and also of the business community
that we find an opportunity to come together. I think it is
important again that we look a second time around about the
utilization of American workers to continue to ensure the
security of this Nation.
So let me thank you again for your testimony and the value
of your testimony is most important, and I believe that this
hearing will help to inform the final rule for the security of
foreign repair stations. The Members of the subcommittee may
have additional questions for the witnesses, and we ask that
you respond to them expeditiously in writing.
Hearing no further business, the subcommittee stands
adjourned. Thank you.
[Whereupon, at 5:07 p.m., the subcommittee was adjourned.]

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