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Weaknesses in FAA's Certification and Delegation Processes Hindered Its Oversight of the 737 MAX 8

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Weaknesses in FAA's Certification and Delegation Processes Hindered Its Oversight of the 737 MAX 8 Weaknesses in FAA’s Certification and Delegation Processes Hindered Its Oversight of the 737 MAX 8 Report No. AV2021020 February 23, 2021 Weaknesses in FAA’s Certification and Delegation Processes Hindered Its Oversight of the 737 MAX 8 Requested by the Secretary of Transportation; the Chairmen of the House Committee on Transportation and Infrastructure and its Subcommittee on Aviation; the Chairman and Ranking Member of the Senate Committee on Appropriations, Subcommittee on Transportation, Housing and Urban Development, and Related Agencies; and Senator Richard Blumenthal Federal Aviation Administration | AV2021020 | February 23, 2021 What We Looked At The Federal Aviation Administration (FAA) has historically maintained an excellent safety record. However, two fatal accidents in 2018 and 2019 involving the Boeing 737 MAX 8 raised concerns about FAA’s oversight and certification of civilian aircraft manufactured and operated in the United States. At the request of Secretary of Transportation Elaine L. Chao and several members of Congress, our office has undertaken a series of reviews related to FAA’s certification of the MAX and its safety oversight, including the Agency’s oversight of Boeing’s Organization Designation Authorization (ODA). Our overall audit objective was to determine and evaluate FAA’s process for certifying the Boeing 737 MAX series of aircraft. In this report, we focused on assessing (1) the effectiveness of FAA’s guidance and processes for managing the certification of the 737 MAX 8 and (2) FAA’s oversight of the Boeing ODA. What We Found While FAA and Boeing followed the established certification process for the 737 MAX 8, we identified limitations in FAA’s guidance and processes that impacted certification and led to a significant misunderstanding of the Maneuvering Characteristics Augmentation System (MCAS), the flight control software identified as contributing to the two accidents. First, FAA’s certification guidance does not adequately address integrating new technologies into existing aircraft models. Second, FAA did not have a complete understanding of Boeing’s safety assessments performed on MCAS until after the first accident. Communication gaps further hindered the effectiveness of the certification process. In addition, management and oversight weaknesses limit FAA’s ability to assess and mitigate risks with the Boeing ODA. For example, FAA has not yet implemented a risk-based approach to ODA oversight, and engineers in FAA’s Boeing oversight office continue to face challenges in balancing certification and oversight responsibilities. Moreover, the Boeing ODA process and structure do not ensure ODA personnel are adequately independent. While the Agency has taken steps to develop a risk-based oversight model and address concerns of undue pressure at the Boeing ODA, it is not clear that FAA’s current oversight structure and processes can effectively identify future high-risk safety concerns at the ODA. Our Recommendations We made 14 recommendations to improve the Agency’s aircraft certification process and oversight of the Boeing ODA. FAA concurred with all 14 of our recommendations and provided appropriate actions and planned completion dates. All OIG audit reports are available on our website at www.oig.dot.gov. For inquiries about this report, please contact our Office of Government and Public Affairs at (202) 366-8751. Contents Memorandum 1 Background 3 Results in Brief 8 Gaps in FAA Guidance and Processes Impacted Certification of the 737 MAX 8 10 Management and Oversight Weaknesses Limit FAA’s Ability To Assess and Mitigate Risks With the Boeing ODA 25 Conclusion 41 Recommendations 41 Agency Comments and OIG Response 43 Actions Required 43 Exhibit A. Timeline of Major Events for the Certification of the Boeing 737 MAX 8 44 Exhibit B. Scope and Methodology 45 Exhibit C. Organizations Visited or Contacted 48 Exhibit D. Glossary of Terms 49 Exhibit E. Background on MCAS 51 Exhibit F. Selected Recommendations to FAA and Actions in Response to the Special Committee 52 Exhibit G. FAA’s Aviation Safety Group Offices Involved in Certification of the 737 MAX Aircraft—Organizational Structure (2017–Present) 53 Exhibit H. Selected OIG Recommendations to FAA on ODA Improvements 54 Exhibit I. Comparison of FAA ODA Oversight Offices for Type Certificate ODA Companies 55 Exhibit J. Major Contributors to This Report 56 Appendix. Agency Comments 57 AV2021020 U.S. DEPARTMENT OF TRANSPORTATION OFFICE OF INSPECTOR GENERAL Memorandum Date: February 23, 2021 Subject: ACTION: Weaknesses in FAA’s Certification and Delegation Processes Hindered Its Oversight of the 737 MAX 8 | Report No. AV2021020 From: Matthew E. Hampton Assistant Inspector General for Aviation Audits To: Federal Aviation Administrator Upholding safety is a primary mission of the Federal Aviation Administration (FAA). This includes overseeing the certification and safety of all civilian aircraft manufactured and operated in the United States. FAA has historically maintained an excellent safety record. However, two fatal accidents in 2018 and 2019 and the subsequent grounding of Boeing 737 MAX 81 aircraft raised questions and concerns about FAA’s certification processes and oversight. Specifically, on October 29, 2018, Lion Air Flight 610 crashed into the Java Sea shortly after departing Soekarno-Hatt International Airport, Jakarta, resulting in 189 fatalities. Just over 4 months later, on March 10, 2019, Ethiopian Air Flight 302 crashed shortly after departing Addis Ababa Bole International Airport, resulting in 157 fatalities, including 8 Americans. Both accidents involved the Boeing 737 MAX 8 aircraft model, which received FAA certification in March 2017. At the request of the Secretary of Transportation and members of Congress,2 our office has undertaken a series of reviews related to FAA’s certification of the 737 MAX 8 and its safety oversight, including the Agency’s oversight of Boeing’s 1 The official model number of the Boeing 737 MAX 8 is the 737-8. 2 On March 19, 2019, Secretary of Transportation Elaine L. Chao requested that we compile an objective and detailed factual history of the activities that resulted in the certification of the 737 MAX 8. We also received similar requests from the Chairmen of the House Committee on Transportation and Infrastructure and its Subcommittee on Aviation; the Chairman and Ranking Member of the Senate Committee on Appropriations, Subcommittee on Transportation, Housing and Urban Development, and Related Agencies; and Senator Richard Blumenthal. AV2021020 1 Organization Designation Authorization (ODA).3 Our audit objective is to determine and evaluate FAA’s process for certifying the Boeing 737 MAX series of aircraft. On June 29, 2020, we issued our first report4 to the Secretary with a detailed, factual timeline of activities resulting in the certification of the 737 MAX 8. The report also provided timelines of events following the October 2018 Lion Air crash up until the March 2019 Ethiopian Air crash and concurrent related oversight actions and events related to FAA’s ODA program. Exhibit A provides a detailed timeline of the major events in the certification of the 737 MAX 8. This report builds on the information provided in the timeline report and includes additional analyses of FAA’s processes for certifying the 737 MAX 8 aircraft, including its use of the ODA program. Specifically, we focused on assessing (1) the effectiveness of FAA’s guidance and processes for managing the certification of the 737 MAX 8 and (2) FAA’s oversight of the Boeing ODA. The third review in this series will focus on FAA actions taken during the decision to ground the aircraft and return it to service. We conducted this audit in accordance with generally accepted Government auditing standards. Exhibit B details our scope and methodology, exhibit C lists the organizations we visited or contacted, and exhibit D is a glossary of terms. We appreciate the courtesies and cooperation of Department of Transportation (DOT) representatives during this audit. If you have any questions concerning this report, please call me at (202) 366-0500. cc: The Secretary DOT Audit Liaison, M-1 FAA Audit Liaison, AAE-100 3 FAA created the ODA program in 2005 to standardize its oversight of organizational designees (e.g., aircraft manufacturers) that have been approved to perform certain functions on the Agency’s behalf, such as determining compliance with aircraft certification regulations. ODAs are responsible for selecting and overseeing the employees who perform delegated functions, known as unit members, rather than FAA approving each individual designee. 4 Timeline of Activities Leading to the Certification of the Boeing 737 MAX 8 Aircraft and Actions Taken After the October 2018 Lion Air Accident (OIG Report No. AV2020037), June 29, 2020. OIG reports are available on our website at http://www.oig.dot.gov/. AV2021020 2 Background FAA is charged with overseeing the safety and certification of all civilian aircraft manufactured and operated in the United States.5 This is a significant undertaking given that the U.S. civil aviation industry includes almost 292,000 aircraft, nearly 1,600 approved manufacturers, and more than 5,400 aircraft operators. Recognizing that it is not possible for FAA employees to oversee every facet of such a large industry, Federal law6 allows the Agency to delegate certain functions to private individuals or organizations, such as determining compliance with aircraft certification regulations. Designees can perform a substantial amount of critical certification work on FAA’s behalf. For example, according to FAA data, in 2018 designated organizations at four U.S. aircraft manufacturers7 approved about 94 percent of the certification activities for their company’s aircraft. In 2009, FAA fully implemented the ODA program to standardize its oversight of organizations (e.g., aircraft manufacturers) that are approved to perform delegated functions on its behalf. ODA is the most recent of many delegation programs in aviation (see figure 1). Figure 1. History of Aviation Delegation Programs Source: OIG analysis of FAA data 5 49 U.S.C. § 44702. 6 49 U.S.C.
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