Two fatal accidents in 2018 and 2019 involving the Boeing 737 MAX raised concerns about the Federal Aviation Administration’s (FAA) oversight and certification of civilian aircraft manufactured and operated in the United States.
At the request of then Secretary of Transportation Elaine L. Chao and several members of Congress, the Office of Inspector General (OIG) at the Department of Transportation 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).
OIG found that while FAA and Boeing followed the established certification process for the 737 MAX 8, there were 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.
Ultimately, OIG determined that 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.
The watchdog has therefore made 14 recommendations to FAA, with which it has concurred. While FAA has set out actions it will take – as well as some already begun – to meet these recommendations, some of the work will not be complete until late 2025.
On February 25, FAA said it has assessed $5.4 million in deferred civil penalties against The Boeing Company for failing to meet its performance obligations under a 2015 settlement agreement. The Chicago-based aircraft manufacturer also agreed to pay $1.21 million to settle two pending FAA enforcement cases.
Under the 2015 agreement, Boeing pledged to change its internal processes to improve and prioritize regulatory compliance. The agreement required the company to meet specific performance targets, and authorized the FAA to assess deferred penalties if it failed to do so.
The FAA assessed $5.4 million in deferred penalties under the terms of the 2015 agreement because Boeing missed some of its improvement targets, and because some company managers did not sufficiently prioritize compliance with FAA regulations. The 2015 agreement prevents Boeing from appealing the FAA’s penalty assessment, and the five-year term of this agreement has ended. Boeing previously paid $12 million in civil penalties as an initial condition of the 2015 agreement. The terms of this new settlement were reached at the end of December 2020.
“Boeing failed to meet all of its obligations under the settlement agreement, and the FAA is holding Boeing accountable by imposing additional penalties,” FAA Administrator Steve Dickson said. “I have reiterated to Boeing’s leadership time and again that the company must prioritize safety and regulatory compliance, and that the FAA will always put safety first in all its decisions.”
Boeing also will pay $1.21 million to settle two enforcement cases. One case alleged the company implemented an improper structure of its FAA-approved Organization Designation Authorization (ODA) program and exerted undue pressure or interfered with ODA unit members. The other case alleged it failed to follow its quality-control processes and subjected ODA members to undue pressure or interference in relation to an aircraft airworthiness inspection.
The FAA said it will be vigilant in its oversight of Boeing’s engineering and production activities, and is actively implementing the certification reform and oversight provisions of the 2020 Aircraft Certification, Safety, and Accountability Act. This legislation will allow FAA to assess even greater civil penalties against manufacturers that exert undue pressure on ODA unit members.