Electronic Records, Traceability, and the FAA’s Efforts to Get Out of Its Own Way

Electronic Records, Traceability, and the FAA’s Efforts to Get Out of Its Own Way

The Electronic Signatures in Global and National Commerce Act (ESIGN) was signed into law on June 30, 2000 — 18 years old this year. If there was any justice in the world, we’d all be buying the law a cigar and allowing it to vote.

ESIGN established a general rule of validity for electronic records, contracts, and signatures. Prior to the law, courts refused to recognize electronic signatures and they questioned electronic records.

ESIGN applies to transactions “in interstate commerce,” which is a term of art meaning the transaction is open to being regulated by Congress under the Interstate Commerce Clause of the Constitution (most transactions, today, are subject to this clause). Generally, it explains that when records and agreements are required to be in writing, an electronic version counts as a “writing.”

ESIGN also applies to federal and state government agencies. They are forbidden from adopting record-keeping rules that would “impose unreasonable costs on the acceptance and use of electronic records.” The law explains that if an agency wants to require paper records (to the exclusion of electronic), then the agency needs to show “there is a compelling governmental interest relating to law enforcement or national security for imposing such requirement.”

Eighteen years after it was enacted, the aviation industry struggles with full implementation of the law. Even though it’s clear that aviation records can be recorded and transmitted electronically, we remain wedded to paper. Nowhere is this more clear than with respect to parts documentation. The industry is still coming to grips with the Maintenance Annex Guidance which imposed a semblance of EASA documentation requirements on receiving inspections (without including the safety valves that exist in the European system).

There are practical reasons the industry prefers paper for aircraft parts. One is because most aircraft parts are unserialized, and it can be difficult to uniquely tie an electronic record to a particular (unserialized) part. A paper record, on the other hand, can be literally, physically, connected to the part. In a world in which we deal with so many different parts coming and going through our warehouses, paper records provide a level of comfort that we are connecting the uniquely correct record to the uniquely correct part.

The FAA has repeatedly said commercial documentation paradigms (like back-to-birth traceability) are not required by FAA regulations. In separate legal opinion letters issued by the FAA’s Office of the Chief Counsel, the FAA has specifically stated that there is no Federal Aviation Regulation that requires traceability of an aircraft part to its origin, and the FAA does not require back-to-birth records (not even for life-limited parts – the law only requires current life status on such parts). The FAA has explained that a part may be identified as having been released by a manufacturer as an airworthy part using “a shipping document, a manufacturer’s certificate of conformance or material certification, or an FAA Airworthiness Approval Tag, Form 8130-3,” but in the absence of such documentation, “the part may be submitted for inspection and testing to determine conformity.”

Despite the best efforts of the FAA’s lawyers, the industry remains stubbornly rooted to a paperwork paradigm. One important reason for this, a reason that is tied back to the FAA itself, is that FAA inspectors frequently insist the manuals for FAA certificate holders feature documentation requirements. Once these requirements are published in the manuals, then these FAA-approved manuals drive the documentation requirements which are flowed-down throughout the industry. And because these documentation requirements are not directly tied to FAA regulations, there is no opportunity to apply the ESIGN mandates and protections to them.

This is not an isolated to a few inspectors. It is promulgated through the entire organization through internal FAA orders. For example, the Flight Standards Information Management System (FSIMS) is where the FAA publishes job instructions for the inspectors in the Flight Standards Service. Those instructions advise inspectors who are examining repair stations to inspect the parts to ensure, “There is traceability of material or parts received from distributors and that the records of receiving inspection data are retained and list the name, part number, quantity, and inspection results.” This is not legal policy – it cannot be enforced against a repair station that refuses to implement such traceability mechanisms – and the Paperwork Reduction Act would likely preclude the FAA from any attempt to punish a repair station for failure to adhere to the policy. But this sort of language is still causing FAA employees to advise certificate holders that traceability should be obtained, even if the law does not require it.

This traceability paradigm impedes certain efforts to move to electronic documentation, because the electronic documentation doesn’t meet traditional notions of traceability.

In conversations with both the FAA and EASA, we are starting to see a new understanding of the value of several important paperwork paradigms. Both agencies are talking about “limiting documentation ‘requirements’ only to those that are actually valuable to safety (so ‘traceability’ requirements better match the actual regulatory requirements),” making acceptable safety information about parts more readily available through trusted industry channels (such as developing new DARs in the US and explicitly permitting reliance on certificates of conformity in the EU); and permitting greater reliance on electronic information where availability of such data supports safety.

This is likely to be related to the greater reliance of the rest of the world on electronic data (a reliance that was facilitated by ESIGN), but it is also related to the fact that senior decision-makers in the FAA and EASA are more comfortable with electronic records than were their predecessors (again, a comfort that was facilitated by the impact of ESIGN on other parts of the world of data). These same senior decision-makers are also thinking more critically about what information supports safety (and should be encouraged) and what does not (and therefore unnecessary to the FAA’s safety mission).

The ESIGN law is 18 years old this year – now is the time to remove impediments that have interfered with its full implementation in the aviation industry.

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