NBAA Resource: FAA’s Proposed SMS Mandate

Updated April 11, 2023

On Jan. 11, 2023, the FAA issued a Notice of Proposed Rulemaking (NPRM) that would require all Part 135 certificate holders, Part 91.147 air tour operators and certain Part 21 Type Certificate (TC) and Production Certificate (PC) holders to implement a Safety Management System (SMS).

View the NPRM FAA-2021-0419 as it appeared in the Federal Register.

The comment period for the NPRM was originally scheduled to close on March 13, 2023. Due to the significance of the proposed rule, NBAA and other industry associations requested an extension of the comment period. The FAA granted this request, extending the SMS NPRM comment period until April 11, 2023.

Proposed Rule Summary

The NPRM would expand Part 5 SMS applicability to:

• Part 135 operators
• Certain Part 21 TC and PC holders – persons that hold both a Type Certificate (TC) and Production Certificate (PC) for the same aircraft, aircraft engine or propeller under Part 21
• §91.147 air tour operators

Notably, the NPRM does NOT include Part 145 certificate holders, as was originally expected.

Although the proposal largely follows existing Part 5 SMS requirements, it incorporates a few amendments.

Proposed changes to existing Part 5 SMS requirements, as mandated by Aircraft Certification, Safety, and Accountability Act (ACSAA), include the following:

• Adding a code of ethics that specifies that safety is the highest priority
  • ACSAA requires this code of ethics for certain Part 21 certificate holders. The FAA proposes expanding the requirement to all Part 5 applicability to ensure consistency of SMS requirements.
• Revising the existing requirement for a confidential employee reporting system by adding a provision to ensure that employees can report without concern of reprisal
  • ACSAA requires this code of ethics for certain Part 21 certificate holders. The FAA proposes expanding the requirement to all Part 5 applicability to ensure consistency of SMS requirements.
• Requiring certain Part 21 TC and PC holders to submit an implementation plan for FAA approval no later than Dec. 27, 2024
• Requiring holders of both a TC and PC for the same product to submit a summary of the confidential employee reports to the FAA every six months

Other proposed changes to existing Part 5 SMS requirements include the following:

• Revising the definition of “hazard” to also mean conditions or objects with the potential to cause or contribute to an incident to align with ICAO definitions more closely
• Requiring regulated parties to develop and maintain a system description that documents the following information about the safety of the organization’s aviation products or services provided:
  • Aviation-related processes, procedures and activities
  • The function and purpose of aviation products and services
  • The operating environment
  • Personnel, equipment and facilities necessary for operation
  • Interfacing persons that contribute to the safety of the aviation-related products and services provided
• Requiring the person conducting the system analysis to consider the interfaces of the system
• Adding a new requirement for SMS documentation to include the system description
• Adding a new requirement for persons to retain records of all communications provided under new §5.94 for a minimum of 24 consecutive calendar months

The proposed effective date of the requirement is 24 months from the publication of a final rule, the date of which is to be determined.

FAA Questions for Industry Input

The NPRM includes several questions for which the FAA would like input from the industry. When responding to specific questions, include the relevant NPRM section number for that question.

What challenges and opportunities does SMS present for smaller organizations?

Reference NPRM Section IX C 1 in your comments.

Should the SMS requirement be limited to a subset of Part 135 operators and § 91.147 LOA holders?

The FAA is aware that there are Part 135 operators that use only one pilot-in-command in their operations, as well as § 91.147 LOA holders with low flight volume. The FAA seeks supporting information and data regarding whether this applicability should be limited to a certain subset of Part 135 operators and § 91.147 LOA holders, and if so, how. If the applicability is limited, provide recommendations for alternatives that would achieve the same safety objectives as SMS for any operators not required to implement SMS.

Reference NPRM Section IX C 2 in your comments.

Should Part 5 apply to all holders of TCs, PCs, supplemental type certificates, technical standard order authorizations, or parts manufacturer approvals?

The FAA considers that there may be safety benefits to applying SMS to a larger portion of the aviation industry that could lead to safety improvements in the aviation ecosystem as a whole. The FAA invites comments as to whether Part 5 should apply to all holders of a TC, PC, supplemental type certificates, technical standard order authorizations, or parts manufacturer approvals. The FAA requests that comments specify whether any exceptions should be made in the event that the FAA extends Part 5 to these design and production approval holders, and what those exceptions should entail. The FAA further requests information and data related to the safety benefits or impact of applying Part 5 to additional design and production approval holders beyond the applicability in this proposed rule.

Reference NPRM Section IX C 3 in your comments.

Should the FAA extend the compliance timeline for persons who license their TC to other persons and, if so, what timelines should the FAA establish?

Under § 5.15(a), the FAA is proposing that any person that holds a TC for a product who allows another person to use the TC to manufacture a product under a PC to be required to submit an implementation plan for FAA approval in a form and manner acceptable to the Administrator no later than Dec. 27, 2024, and implement the SMS in accordance with the FAA-approved plan no later than Dec. 27, 2025. These proposed compliance dates are consistent with the proposal under § 5.11 for holders with a TC and a PC for the same product issued under Part 21.

If the compliance timeline should be extended, in your opinion, include the rationale in your comments.

Reference NPRM Section IX C 4 in your comments.

Can organizations share information about hazards without disclosing proprietary information?

Provide examples of situations in which the holder of proprietary information would not be able to share information about a hazard without disclosing that proprietary information. Also, comment on whether the holder of the proprietary information would be in the best position to address the hazard.

Reference NPRM Section IX C 5 in your comments.

Is the NPRM compatible with the Paperwork Reduction Act?

Evaluate whether the proposed information requirement is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility.

Evaluate the accuracy of the agency’s estimate of the burden.

Enhance the quality, utility, and clarity of the information to be collected

Minimize the burden of collecting information on those who are to respond, including by using appropriate automated, electronic, mechanical or other technological collection techniques or other forms of information technology.

Reference NPRM Section IX C 6 in your comments.

Is there data or other evidence of the effectiveness of SMS in mitigating accidents and incidents?

Reference NPRM Section IX C 7 in your comments.

Has the FAA accurately estimated the most likely effectiveness of mitigation of any specific accidents through the proposed rule?

Appendix A of the Regulatory Impact Analysis (RIA) lists the accidents that inform the RIA and includes the FAA’s assessment of the effectiveness of SMS mitigating the accident as well as the FAA’s rationale:

Reference NPRM Section IX C 8 a in your comments.

Does the FAA’s rationale accurately assess how the use of an SMS would potentially mitigate the hazards that caused the accidents?

Reference NPRM Section IX C 8 b in your comments.

What would be a reasonable intervention to mitigate the specific hazards identified, and what would be a reasonable estimation for the cost of the intervention or mitigation?

Provide data or analysis to support your response.

Reference NPRM Section IX C 8 c in your comments.

Are there additional accidents or incidents that SMS could have meaningfully mitigated?

Reference NPRM Section IX C 8 d in your comments.

Should the FAA consider a future rulemaking project to expand the applicability of Part 5 to include repair stations certificated under Part 145?

Repair stations perform a wide range of repair and maintenance work on an equally wide range of aircraft and components. Some repair stations do not perform work on aircraft used for passenger-carrying operations. Should the FAA consider applying Part 5 to all certificated Part 145 repair stations? Should applicability be limited to a subset of Part 145 repair stations? The FAA seeks information and supporting data regarding how the applicability should be limited to a subset ( i.e., to which repair stations should Part 5 be applicable).
Reference NPRM Section IX C 9 in your comments.

Providing Comments on the Proposed Rule

When addressing specific FAA questions in consolidated comments, identify the specific NPRM section item number for each response.

Comments should be identified by docket number FAA-2021-0419 and submitted using any of the following methods:

• Federal eRulemaking Portal
  • Go to https://www.regulations.gov/document/FAA-2021-0419-0001 and follow the instructions for sending your comments electronically.
• Mail comments to the following address:
  • Docket Operations, M-30
    U.S. Department of Transportation (DOT)
    1200 New Jersey Avenue SE
    Room W12-140, West Building Ground Floor
    Washington, DC 20590-0001

NBAA will be developing a tool to simplify the comment submission process. This tool is expected to be available in March 2023.

Members should consider taking time to develop thorough comments on the NPRM, to provide answers to FAA questions, supported by data. All comments received by the April 11, 2023, deadline must be taken into consideration. There is no advantage to submitting comments early in the comment period.

Questions?

If you have questions about the NPRM or the process for submitting comments, contact NBAA at sms@nbaa.org.