Federal Aviation Administration

1. Federal Aviation Administration Safety Management Systems for Design and Manufacturing (D&M) Organizations Pilot Project Executive Summary MSMS Team FAA Aircraft Certification Service

2. Executive Summary Topics • The Need for SMS • SMS Background • ICAO and FAA linkage • Internal vs. External SMS • Part 5 Rulemaking • SMS Components • D&M SMS Pilot Project Overview • Communications with the FAA

3. The Need for SMS • SMS has the potential to provide an order of magnitude reduction in the accident rate. • The accident rate in the US is at an all time low(2010 Air Carrier rate = 0.3/100 million passengers) • US air traffic is expected to doubleover the next 15 years • Without this sort of change the number of annual accidents may double as well. World-wide average: 31 multi-engine a/c accidents/year

4. The Need for SMS (cont’d) • International acceptability of products may be predicated on the implementation of SMS. • ICAO has defined the necessity for implementation of SMS • Many countries are already requiring SMS to be implemented • SMS has the potential to reduce the cost of remedial action within a design or production system that will save valuable resources.

5. SMS Requirements Hierarchy ICAO and FAA Linkage ICAO State Safety Program (SSP) • Annex 8 • Safety Management Manual (ICAO Doc 9859) • Order 8000.369; FAA SMS Guidance • Order VS8000.367; AVS SMS Requirements • Part 5 SMS rulemaking FAA Office of Aviation Safety (AVS) AVS Lines of Business D&M SMS Framework D&M SMS Pilot Project Guide FAA Aircraft Certification Service (AIR) Future - regulations and associated policies SMS for D & M Organizations

6. FAA SMS AVSSMS ATO SMS ARP SMS AST SMS Alignment across LOBs What is FAA’s internal SMS? • FAA will implement an SMS comprised of aligned SMSs in: • Aviation Safety (AVS) • Air Traffic Organization (ATO) • Airports (ARP) • Commercial Space Transportation (AST).

7. D&M SMS relation to FAA’s internal SMS? Industry Cert Holder SMS Cert Holder SMS Cert Holder SMS Cert Holder SMS AVSSMS AVS is incorporating SMS principles and tools into the processes and procedures used to oversee industry. Certificate holders across industry (e.g. operators, airports, D&Ms) will implement their own SMS to manage the risk in their operations.

8. D&M SMS relation to FAA’s internal SMS? (cont’d) Industry Cert Holder SMS Cert Holder SMS Cert Holder SMS Cert HolderSMS AVSSMS The AVSSMS and industry SMSs will be aligned to share data/information, results of safety risk analyses, etc. to more effectively and efficiently provide assurance of the safety of the operations.

9. Part 5 SMS NPRM Public Law 111-216, section 215 (August 1, 2010) directed FAA to issue a proposed SMS rule for Part 121 operators within 90 days Part 5 Notice issued Nov 5, 2010 The preamble is important to understand context of the rule SEC. 215. SAFETY MANAGEMENT SYSTEMS. (a) RULEMAKING.—The Administrator of the Federal Aviation Administration shall conduct a rulemaking proceeding to require all part 121 air carriers to implement a safety management system. (b) MATTERS TO CONSIDER.—In conducting the rulemaking under subsection (a), the Administrator shall consider, at a minimum, including each of the following as a part of the safety management system: (1) An aviation safety action program. (2) A flight operational quality assurance program. (3) A line operations safety audit. (4) An advanced qualification program. (c) DEADLINES.—The Administrator shall issue— (1) not later than 90 days after the date of enactment of this Act, a notice of proposed rulemaking under subsection (a); and (2) not later than 24 months after the date of enactment of this Act, a final rule under subsection (a). (d) SAFETY MANAGEMENT SYSTEM DEFINED.—In this section, the term ‘‘safety management system’’ means the program established by the Federal Aviation Administration Enact a final rule within 24 months

10. What does Part 5 Propose? Requires Part 121 operators Develop and implement SMS Submit their SMS implementation plan within 6 months of the effective date of a final rule. Full implementation within 3 years New 121 applicants – must implement SMS prior to beginning Operations Public comment period closed Mar 7, 2011 DEPARTMENT OF TRANSPORTATION Federal Aviation Administration 14 CFR Parts 5 and 119 [Docket No. FAA–2009–0671; Notice No. 10–15] RIN 2120–AJ86 Safety Management Systems for Part 121 Certificate Holders AGENCY: Federal Aviation Administration (FAA), Department of Transportation (DOT). ACTION: Notice of proposed rulemaking (NPRM)… ANPRM for SMS was rescinded on March 17, 2011 to update the docket (ANPRM comment review and corresponding ARC report was used to develop Part 5 ). FAA continues to consider potential rulemaking for Part 21 and others per the original ANPRM.

11. What does Part 5 Propose? (cont’d) Key Points of Emphasis: International harmonization Scalability and flexibility SMS rule is not a substitute for existing regulatory compliance Documentation and recordkeeping are to be kept as long as relevant to operation.

12. What does Part 5 Propose? (cont’d) Other Important Points: Proposal aligns with core SMS documentation Cost-benefit identifies positive return for industry Proposal introduces SMS terms and definitions SMS is intended to be performance-based Part 5 has been drafted with the intent that it could be applied to D & M organizations in the future

13. Part 5 vs. D&M SMS Framework • Why and how are they different? • FAA Rulemaking team and the MSMS Team started with the ICAO SMS framework and FAA Order VS8000.367 Appendix B • D&M SMS framework designed to support pilot project objectives • D&M SMS framework developed for D&M organizations • Air Operator terminology vs. D&M terminology • System definition and associated hazards • D&M framework safety assurance component more rigorous • D&M SMS Framework developed before Part 5 requirements • Part 5 may change as a result of public comment

14. Addressing Differences Pilot Project feedback will help us develop appropriate FAA regulations and associated policies for D&M organizations We will reconcile any differences between the framework and the final version of Part 5 Interoperability Standardization Enforceability Unique D&M Attributes

15. Safety Promotion The Four Components of SMS Policy Safety Assurance Safety Risk Management SMS is a management system and it applies to an entire organization not just the specific design and manufacturing elements of a company

16. The Four Components of SMS • Safety Policy:Establishes senior management’s commitment to continually improve safety; defines the methods, processes, and organizational structure needed to meet safety goals. • Safety Risk Management:Determines the need for, and adequacy of, new or revised risk controls based on the assessment of acceptable risk (applicable to products, processes and organizational decisions). • Safety Assurance:Evaluates the continued effectiveness of implemented risk control strategies; supports the identification of new hazards. • Safety Promotion:Includes training, communication, and other actions to create a positive safety culture within all levels of the workforce.

17. D&M SMS Pilot Project Anticipated Pilot Project Duration and Launch Timeframes 2013 & beyond Jan – Jun 2011 Jul – Dec 2011 Jan – Dec 2012 Pratt & Whitney Honeywell Co. No. 3 Co. No. 4 Co. No. 5 Co. No. 6 Co. No. 7 Co. No. 8 Co. No. 9 Co. No. 10 Co. No. 11 Co. No. 12 Participants build and improve their SMS… Potential Rulemaking Activities Participants:Design & Manufacturing Companies – representing a cross-section of the industry (small, med, large, TSO/PMA, STC to TC/PC, aircraft, engines, parts) FAA Involvement: MSMS Team and Local ACO/ECO and MIDO representatives

18. High-Level Concept and Purpose of Pilot Project Concept: To collaboratively work with Industry to develop a workable D&M SMS model. Purpose: To collect input on potential rulemaking requirements, scalability, applicability, implementation assessment/oversight methods, tools and guidance as they relate to D&M SMS.

19. High-Level List of Tasks Required During Pilot Project Level 1 – Approximately six months Orientation & Preliminary Gap Analysis Detailed Gap Analysis Develop Implementation Plan & ID Safety Objectives Develop Safety Policy Levels 2 & 3 – go through Level 2 and into Level 3 within 18 months Document and Implement Company’s SMS Evaluate Progress to SMS Goals/Objectives Conduct SRM and SA Maintain Policy and Promote SMS Level 4 – Continuous Improvement

20. Preliminary Gap Analysis Tool • Purpose • Enables a company to take a quick snap shot of where they are in terms of SMS functionality • Facilitates dialogue between FAA and participants • Caution: Preliminary Gap Analysis results may appear to show a large gap though the effort to close the gap may be small • Link to Preliminary Gap Analysis Tool

21. Responsibilities and Expectations

22. Management Commitment and Resources Identify an accountable executive to oversee the implementation and maintenance of the SMS Executives commit to sponsoring and providing resources to implement and maintain SMS Executives and management learn SMS concepts Executives and management endorse SMS policy and define objectives Executives and management promote SMS throughout the organization Visibly endorse SMS Personally involved in the SMS implementation Communicate SMS implementation and benefits to the workforce.

23. Benefits of Participating in the Pilot Project • Opportunity to achieve safety benefit of SMS • Contribute to shaping of FAA regulations, orders and policy • Get a head start toward implementing SMS • At the forefront of influencing/shaping the larger international aviation D&M community • Enables the local FAA office to support the participant and become knowledgeable of SMS • Providing for a more seamless integration of SMS into the Pilot Project Participant’s system.

24. FAA - Participant Communications • Interaction managed by Participant POC and FAA’s Participant Management Team Lead • Anticipated meetings in Level 1: • Scheduled and ad-hoc discussions to understand D&M SMS Framework and Developmental Guidance • Important for us to work closely together in initial activities • Detailed Gap Analysis and Implementation Plan review meeting (Exit Level 1 discussion) • Information may be exchanged in-person and/or via email, phone and SharePoint site • FAA will ask for feedback on the SMS expectations, assessment process, and pilot project process

25. Key Executive Summary Takeaways Need your commitment to apply the necessary resources to conduct the Pilot Project Need to work collaboratively over the next 18 months to support the pilot project Looking for your input to shape the future of SMS We look forward to working with you in Aircraft Certification’s D&M SMS Pilot Project