FAA’s Special Technical Audit of Boeing and the Audit Resolution Plan

1. FAA’s Special Technical Audit of Boeing and the Audit Resolution Plan

2. FAA’s Special Technical Audit (STA) of Boeing is complete FAA has reviewed the findings and analyzed the data collected FAA has developed and is implementing a comprehensive Audit Resolution Plan - 3 phased series of actions Purpose

3. STA found no immediate safety issues related to Boeing’s design or manufacturing processes FAA and Boeing have implemented corrective actions to address specific issues from the STA Corrective actions: Short term - addresses specific issues - complete Today - additional resource intensive actions Extra checks Root cause analysis Longer term - broad based systemic improvements Boeing Today - FAA View

4. Series of high visibility production breakdowns in the fall of 1999 FAA determined that a comprehensive audit of Boeing was necessary and should be performed in advance of regularly scheduled audits The purpose of the STA was to determine if the production breakdowns were isolated events or representative of systemic issues Why did the FAA Conduct the STA?

5. FAA team consisted of 18 engineers and inspectors - all with broad aircraft certification experience, many from other geographic regions STA team evaluated 7 major production and engineering facilities over an 11 week period The STA was an enhancement of our normal surveillance process combining system level criteria with detail product checks. STA focused on: Compliance reviews Conformity reviews (hardware audits) Process reviews STA Process Overview

6. Findings show systemic issues - not isolated events Characterization of systemic issues Some processes are incomplete or overly complex Processes are not always followed Inadequate work instructions Inadequate inspections to assure product matches design (conformity) Personnel not knowledgeable of approved processes and procedures Findings illustrate design and production systems are not functioning as intended No immediate safety issues STA Key Findings

7. Audit Resolution Plan - Overview Root cause data Part 1 Immediate Actions Specific corrective actions to resolve all production and engineering findings Part 2 Additional Actions Additional actions to assure compliance and conformity at delivery Part 3 Systemic Changes Systemic process improvements driven by root cause analysis of data from Parts 1 & 2 Root cause data Necessary to fix specific, localized deficiencies Necessary for continued deliveries of conforming & complying airplanes Necessary to fix systemic, root cause deficiencies • Replacing isolated fixes with broad based - robust, • systemic fixes

8. All production related findings have been corrected Example: Planning errors in the instruction used to manufacture and assemble parts All engineering findings have been addressed. Work is continuing to close remaining 6 findings. Example: Incomplete coordination of design and specification changes Detailed analysis of specific findings is being conducted to understand root causes Immediate Actions (Part 1) - Status

9. Significant additional actions implemented to assure compliant and conforming products Boeing restricted supplier inspection authority 70 additional Boeing personnel on site at suppliers to increase supplier oversight and product inspections All Boeing manufacturing facilities have implemented structured self audit processes 300 additional Boeing personnel dedicated to performing individual airplane checks for compliance and conformity Institutionalized compliance board to scrutinize changes on every airplane Detailed analysis of the data obtained from these actions is being conducted to understand root causes Additional Actions (Part 2) - Status

10. FAA and Boeing conducting systemic root cause analysis (RCA) of data from Parts 1 and 2 of the Audit Resolution Plan RCA is necessary to identify solutions that will provide: Clear work instructions used to manufacture parts Simplified engineering requirements and processes. Documentation of engineering practices. Consistent - high quality suppliers and sub-tier suppliers Compliance to production processes and procedures This is an on-going phase (through 2002) that will result in clear and robust processes that assure complying, conforming and safe airplanes Systemic Changes (Part 3) - Status

11. The FAA is always looking for ways to improve our oversight processes During the STA we applied enhanced evaluation techniques Conformance reviews (product audits) Structured interviews Enhanced supplier evaluation criteria and sub-tier supplier reviews Incorporating these enhancements in future audits Continuous Improvement in Oversight

12. Systemic issues identified during the audit The Audit Resolution Plan is headed in the right direction - it goes beyond fixing specific problems - it fixes the systems Until the system changes are fully implemented, significant additional FAA and Boeing resources dedicated to assure compliant, conforming and safe airplane deliveries FAA surveillance process being revised based on lessons learned. This will improve FAA oversight function at Boeing and othermanufacturers. Boeing STA - Summary