How the FAA Ceded Aviation Safety Oversight to Boeing

The Federal Aviation Administration’s (FAA) close relationship with the industry it regulates is under increased scrutiny following two Boeing 737 Max commercial jet crashes that killed 346 people within the last six months. Of particular concern is an FAA program, begun nearly 15 years ago, under which companies, including Boeing, self-certify components of their aircraft designs with limited FAA oversight.

In hearings Wednesday, facing questions from Senators about oversight of the certification of the 737 Max and the FAA’s relationship with Boeing, top Transportation Department officials by turns defended and pledged to closely examine the agency’s system for certifying aircraft safety.

In written testimony, Acting FAA Administrator Daniel Elwell told a Senate panel on aviation and space that under its current certification system, “the FAA retains strict oversight authority” over aircraft certification, but that “we know that our oversight approach needs to evolve to ensure that the FAA remains the global leader in achieving aviation safety.” Transportation Department Inspector General Calvin L. Scovel III, whose office announced earlier Wednesday it had launched an investigation into the certification of the 737 Max, said in prepared remarks, the “FAA plans to introduce a new process that represents a significant change in its oversight approach” by the end of July of this year.

Indeed, in the coming months, Congress and an FAA-convened expert panel will also be examining aspects of the FAA’s current certification system and whether it has increased safety risks.

Since it was formed over 60 years ago, the FAA has delegated some safety certification responsibilities to the aviation industry and to individuals. But in 2005, the FAA began delegating even more responsibility to industry and individuals as part of a plan dubbed ODA, or the “Organizational Designation Authorization” program.

Under this program, companies now play a larger role in approving the airworthiness—and thus the safety—of their own aircraft. As the Transportation Department’s Inspector General reported in 2015, “One aircraft manufacturer approved about 90 percent of the design decisions for all of its own aircraft.” For its part, Congress has, as The New York Times put it, “repeatedly endorsed” industry self-regulation on the grounds that it reduces costs to the federal government and streamlines the certification process for companies.

But the recent Boeing crashes in Ethiopia and Indonesia have sparked increased Congressional scrutiny of the ODA program, which follows years’ worth of watchdog reports pointing out problems and risks stemming from the program. Senator Richard Blumenthal (D-CT) wrote in a recent letter to the FAA that the program has “effectively left the fox guarding the henhouse.”

The 737 Max aircraft was approved under the ODA program. In 2011, facing the possibility of losing business to Airbus, Boeing began developing the 737 Max by introducing major changes to the software and design of earlier 737 models. To speed up the development of the 737 Max and to minimize the aircraft’s cost to potential customers like American Airlines, Boeing portrayed those changes as not significant enough to require additional pilot training, according to The New York Times. The FAA agreed with Boeing’s argument that pilots did not need to be trained on the new software, the Times reported, and, in response to questions from Senators Wednesday, Acting FAA Administrator Elwell defended the agency’s decision.

FAA spokesperson Gregory Martin told the Project On Government Oversight (POGO) in an email, “Related to certification of the [737 Max], FAA experts, including chief scientists, engineers and flight test pilots, conducted in-flight testing of the flight control system, including the [Maneuvering Characteristics Augmentation System] MCAS.”

While investigations of the root causes of the two 737 Max crashes are ongoing, experts suspect that some of the aircraft’s new features—including software called the Maneuvering Characteristics Augmentation System, or MCAS, and the corresponding lack of training—contributed to the two crashes.

According to Elwell’s testimony on Wednesday, the FAA is reviewing and testing an “enhancement” to the MCAS software system, which Boeing submitted the proposal for on January 21, following concerns about the role of the software in the first 737 Max crash off the coast of Indonesia in October. The FAA received the proposal for the patch, as the Seattle Times noted, about six weeks before the Ethiopian Airlines 737 Max crash in March. Boeing is expected to submit a final version to the FAA this week.

“Everyone assumes someone in the system will catch something like this,” said former Boeing physicist Stan Sorscher, referring to the suspected failings of the 737 Max. Sorscher, who worked for the company for 20 years, now represents Boeing’s unionized workers for the Society of Professional Engineering Employees in Aerospace. “If you talk to any Boeing person…there is a sense of personal responsibility for safety.”

But, he said, every aircraft program has its own organizational culture that balances competing priorities—such as aircraft weight versus cost savings—and solves problems differently. He pointed to Boeing’s 777 program as a positive example. From a study he conducted, Sorscher concluded that the 777 program had an “active problem-solving culture,” where “coordination and solutions were managed within the routine flow of work.”

“Bad news was demanded early on,” Sorscher told POGO.

On the other end of the spectrum, according to Sorscher, was Boeing’s 787 program, where bottom-up input was discouraged. “No one ever said ‘no,’” he said, which contributed to the program’s schedule delays and design flaws. He says the 737 Max program fell somewhere between these two examples.

Questions about the FAA’s oversight of Boeing that have emerged in the wake of the two fatal crashes underscore long-standing concerns about industry capture of the FAA, from lobbying by the aerospace industry—Boeing spends millions lobbying Congress and federal agencies each year—to the revolving door between the FAA and Boeing and other companies and lobbying groups in the industry. As James Hall, former chairperson of the National Transportation Safety Board told NPR Wednesday, “All anyone has to do is look at the revolving door in Washington, DC, in this agency, and the industry, to realize that there is a cozy relationship [between the FAA and industry]. Now the question is: is that cozy relationship having an adverse impact on the safety decisions being made?”

Elwell, who was appointed to the number two spot at the FAA in June 2017 and became the agency’s acting head in January 2018, has gone through the revolving door himself. After serving as an assistant administrator of the FAA from 2006 to 2008, he left government to become vice president of the Aerospace Industries Association, a top industry lobby funded in part by Boeing, and in 2013 became a senior vice president at an airline lobbying group, Airlines for America, before founding a consulting firm in 2015. ProPublica reported Wednesday that Elwell maintained close ties with his former lobbyist colleagues after returning to the FAA, corresponding about policy matters.

When Elwell first worked for the FAA in 2006, the agency was led by Marion Blakey, during whose tenure the ODA program had been launched the previous year. Blakey left the FAA in 2007 to head the Aerospace Industries Association. (She led the Association until 2015.) The Association has long promoted the ODA program, lobbying Congress and the FAA for its expansion.

In response to questions from POGO, Gregory Martin, the FAA spokesperson, said in an email, “FAA has never allowed companies to police themselves or self-certify their aircraft. With strict FAA oversight, delegation [of certification] extends the rigor of the FAA certification process to other recognized professionals, thereby multiplying the technical expertise focused on assuring an aircraft meets FAA standards.”

The FAA’s stance on the ODA program is that the agency “doesn’t have the resources” to certify all new designs and that, by delegating responsibilities to industry, the FAA can “concentrate its resources on the most safety-critical matters.”

But that only works if the agency knows where to focus its time and resources, that it has the right staff, whose concerns are supported by management, and that it has the information needed to verify what the companies are telling the agency. At the outset of the ODA program, in 2006, the Government Accountability Office (GAO) warned that as the agency was embarking upon changes that “remove FAA from direct oversight of the individuals performing the delegated activities, it will be important for the agency to adhere to its policy of using designees only for less safety-critical work. It will also be important for FAA to have the data and evaluative processes…to effectively monitor the new program.”

Since then, a series of reports by the Transportation Department’s top watchdog and others have found that the FAA hasn’t done enough over the years to cut the risks created by the ODA program.

In 2011, the Department’s Inspector General issued a warning of the “potential risk that an ODA company could appoint unit members with inadequate qualifications or a history of poor performance to approve certification projects.” The watchdog also wrote that fundamental flaws in the FAA’s system for determining which projects FAA engineers should focus on led to “a tendency to identify projects as low risk regardless of inputs that suggested higher risk factors.”

The New York Times reported last week that the 737 Max’s “software—powerful as it was—did not emerge as a major focus for the F.A.A. regulators who certified the Max as safe to fly in 2017.”

In 2012, the Inspector General’s office found that the FAA’s Transport Airplane Directorate (TAD), which is the part of the agency with authority over Boeing’s commercial airlines division, “and FAA headquarters managers have not always supported TAD employee efforts to hold Boeing accountable.” FAA employees “expressed concerns regarding a recent re-organization that merged Boeing's Certification Office with the ODA. In particular, TAD employees did not believe employees from the former Boeing Certification Office, given their previous role was to deliver airplanes, would effectively advocate FAA’s position.”

It was apparently uncomfortable for these FAA employees to come forward. The Inspector General’s office noted that, out of 15 Transport Airplane Directorate employees it interviewed, “9 feared retaliation and 7 requested confidentiality (including some who requested to be interviewed offsite) because of a fear of retaliation.”

In a memo responding to the Inspector General report six months later, the FAA dismissed the retaliation finding, saying the Inspector General had only interviewed 3 percent of the staff at the Transport Airplane Directorate. The FAA also responded to the Inspector General’s claim that a “conflict of interest” was posed by the fact that “Boeing ODA members had aircraft delivery goals included in their performance standards,” saying that the FAA allowed company employees with ODA responsibilities to also “have company performance standards beyond their FAA-appointed functions.” The FAA pledged to “continue to monitor all ODAs for possible conflict [sic] of interest.”

At the time of the Inspector General investigation, Ali Bahrami was the manager of the Transport Airplane Directorate. In 2012, Bahrami co-chaired, with a Boeing official, an FAA-convened task force on streamlining aircraft certification. One of the task force’s recommendations was to achieve “ODA streamlining success,” which “can be defined as ODA management of any function that is not inherently governmental”—in other words, involving the government as little as possible. The next year, Bahrami went to work for the Aerospace Industries Association, where he promoted increasing delegation of FAA responsibilities to industry.

“We have over half a century of successful history with delegation. This successful history supports expansion of delegation based on data,” Bahrami testified to Congress in 2013 when he was vice president for civil aviation at the Aerospace Industries Association. “We urge the FAA to allow greater use of delegation, not only to take full advantage of industry expertise, but to increase the collaboration that improves aviation safety.” In 2017, he returned to the FAA as the associate administrator for aviation safety.

The FAA declined to provide any comment regarding Bahrami.

During that 2013 hearing, a representative of an association of FAA employees said there were not enough FAA inspectors to oversee companies. Michael Perrone, president of the Professional Aviation Safety Specialists (a union affiliated with the AFL-CIO), testified, “The FAA cannot keep delegating out work without an adequate number of inspectors to oversee the designees. In our view, this is an aviation safety issue.”

“Oversight is especially difficult to ensure in the ODA program where an entire corporation performs work on behalf of the FAA,” Perrone said. “Certification activity is on the rise due to industry changes and advances in technology.”

Backing up Perrone’s concerns, the Inspector General found in 2015 that the FAA may not have had enough staff to oversee ODA companies with the power to certify new aircraft designs and components. While the agency and the watchdog couldn’t definitively say there were staffing shortfalls, out in the field, leaders at four out of six FAA oversight offices “expressed concern with staffing levels.”

“At one office, an FAA manager requested additional staff but was denied and directed to negotiate an agreement with another office to share resources,” the Inspector General report noted.

The Inspector General also found that “FAA does not know whether it has adequate staffing levels needed to meet workload requirements at the largest ODA oversight office,” which is the office in charge of overseeing Boeing.

The watchdog also reported that shortcomings in the FAA’s oversight processes meant the agency’s oversight was not “fully targeted toward the areas of highest risk”—one of the concerns the Inspector General had raised four years earlier and urged FAA to account for.

In the last few years, the FAA’s deference to the aerospace industry has apparently deepened, according to a 2017 scorecard on the ODA program, jointly created by the FAA, the Aerospace Industries Association, and another industry association. The scorecard examined 36 aerospace companies that the FAA and industry said did not have to inform the FAA in writing about “low risk design changes.” Before 2015, only 14 percent of the 36 companies had this authority, known as “No-Project Notification Letter” authority. By 2018, 89 percent did. And the number of aerospace industry projects involving written notification to the FAA about design changes dropped from 89 percent in 2015 to 59 percent in 2017.

Boeing, long a big spender on lobbyists, has recently taken on heavy-hitting influence-peddlers to represent its interests before Congress and the executive branch, including several with ties to former Members of Congress, according to Roll Call. The newspaper also reported that “earlier in 2019, Boeing retained the outside lobbying firm Ballard Partners, whose partner Brian Ballard is considered close to” President Trump.

In their most recent disclosure for the last quarter of 2018, Boeing’s lobbyists cite “certification” as one of the issues on which they have lobbied Congress and the FAA. One of the company’s external lobbying firms listed “Organization Designation Authorization (ODA) and certification issues” in lobbying disclosures filed from 2013 through 2015.

In February, Boeing’s political action committee “doled out $827,000 in political contributions,” according to a review by The Daily Beast, which noted that amount is “more than Boeing’s political action committee has ever reported donating in a single month.”

Boeing also has ties to a number of current and former high-level government officials, as a recent POGO report details. Indeed, Acting Secretary of Defense Patrick Shanahan hails from the company’s executive suite and ran its airplane programs from 2008 to 2016. Last week, the Pentagon’s Office of Inspector General announced it is investigating whether Shanahan has favored Boeing while in government.

More information is likely to emerge in coming weeks, through recently launched investigations and further Congressional hearings. Representative Peter DeFazio (D-OR) stated Tuesday that the House transportation committee had opened an investigation into the FAA’s approval of the 737 Max, and the FAA announced earlier this week that it is convening an outside panel of experts to examine the agency’s certification process.