Boeing Agrees to Pay $12 Million and Enhance its Compliance Systems to Settle Enforcement Cases

Published on : Tuesday, December 22, 2015

faaThe U.S. Department of Transportation’s Federal Aviation Administration today announced a comprehensive settlement agreement with Boeing Commercial Airplanes (BCA) that resolves multiple pending and potential enforcement cases.

Under the agreement, BCA pledged to implement and improve several certification processes to further enhance the airworthiness and continued compliance of all BCA products.

“It is imperative that everyone complies with our aviation system’s high safety standards,” said U.S. Transportation Secretary Anthony Foxx.  “This agreement is an important step toward ensuring that Boeing fully meets all applicable compliance standards going forward.”

“Compliance requires all certificate holders to develop and implement internal controls that ensure they’re operating according to the highest standards,” said FAA Administrator Michael Huerta. “Boeing has agreed to implement improvements in its design, planning, production and maintenance planning processes, and has already implemented several of these improvements.”

BCA’s obligations commit the company to meeting specific performance targets. They are designed to enhance BCA’s early discovery and self-disclosure of potential regulatory compliance problems, as well as the timely development and implementation of effective corrective actions.

The company also must make an immediate payment to the United States Treasury in the amount of $12 million and faces stiff penalties for failing to follow through on its commitments.

BCA’s obligations include:

Improved Management Oversight and Accountability

Internal Auditing

Enhanced Supplier Management

Quality and Timeliness Regulatory Submissions

 Specification Simplification

First-Article Verification

Stampings and Other Verification Records Accuracy

 

 

Corrective Action Development, Implementation and Sustainment

 

BCA’s Reporting Obligations

BCA will face up to $24 million in additional penalties over the next five years if it fails to implement its obligations under the agreement.

The performance period for BCA’s commitments begins Jan. 1, 2016 and will continue for five years unless the FAA and BCA agree to an extension.

The agreement settles two initiated cases and 11 other matters that were opened during the last several years.

The first initiated case involved BCA’s tardiness in developing information for the installation of fuel tank flammability reduction equipment on Boeing 747 and 757 aircraft. The second initiated case involved the company’s insufficient corrective action after discovering that a supplier had been providing incorrectly shaped fasteners. The FAA did not allege that these issues created unsafe conditions.

The uninitiated matters involved allegations of delays in submitting required safety information, production quality control problems, and failures to implement corrective actions for those production problems.

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