Aviation Source Approval Management Handbook.pdf

Aviation Source Approval and Management

Handbook

16 March 2011

NAVAIR Public Release 11-514 Distribution Statement A – Approved for public release; distribution is unlimited

CHANGE RECORD

Change Number Section Page Description Date

TABLE OF CONTENTS

CHAPTER 1 General Information ................................................................. 1-1

1.1 Types of Sources Considered for Approval ................................................. 1-2

1.2 CSIs from Unapproved Sources in Existing Inventory ................................ 1-4

1.3. Other Services’ Approved Sources (Source Reciprocity) ............................ 1-5

1.4. Sources Identified on Control Drawings ................................................... 1-5

1.5. Historical Sources of Supply .................................................................... 1-6

1.6. Local Purchase and Repair ...................................................................... 1-7

1.7. Service Depots and Other Government Facilities ...................................... 1-7

1.8. Sources of Surplus Materials ................................................................... 1-8

1.9. Reverse Engineering and Reengineering .................................................. 1-9

1.10. Parts Manufacturer Approval (PMA) Source of Supply ............................1-10

Chapter 2 Procuring Activity Responsibilities in Source Management ....... 2-1 Chapter 3 Source Approval Requests (SAR) ................................................ 3-1

3.1. SAR Risk Management ........................................................................... 3-1

3.2. SAR Development and Contents ............................................................. 3-2

3.3. Integrated Materiel Manager (IMM) Responsibilities ................................. 3-3

3.4. SAR Review ........................................................................................... 3-3

3.4.1. Cognizant Service ESA Responsibilities .............................................. 3-4

3.5. Technical Review ................................................................................... 3-4

3.5.1. Engineering Review ......................................................................... 3-5

3.5.2. Manufacturing, Repair, Overhaul, Maintenance and Modification (ROMM) Review ....................................................................................................... 3-8

3.5.3. Quality Assurance Review ...............................................................3-12

3.6. SAR Disposition ....................................................................................3-15

3.7. Government Quality Assurance and Test Requirements ...........................3-15

Chapter 4 Reverse Engineering Process ...................................................... 4-1 Chapter 5 Alternate Source Site Survey ...................................................... 5-1

5.1. Site Survey Checklist .............................................................................. 5-2

5.2. Pre-Award Surveys ................................................................................. 5-3

5.3. Repository for Past Site Surveys.............................................................. 5-3

Chapter 6 Source Validation and Disqualification ....................................... 6-1

6.1. Revalidation of Sources of Supply ........................................................... 6-1

6.2. Re-qualification of Sources of Supply ...................................................... 6-2

6.3. Notification of Removal as Approved Source ............................................ 6-2

Chapter 7 Government Manufacture of Critical Items (CI) ........................ 7-1

7.1. Government Manufacturing Authorization via Alternate Source Qualification7-1

7.2. Government Manufacturing via One-Time Manufacturing Authorization ..... 7-2

7.2.1 CSI .................................................................................................. 7-2

7.2.2 CI, other than CSI ............................................................................ 7-3

APPENDICES

Appendix I Acronyms ......................................................................................... I-1

EXHIBITS

Exhibit A Source Approval Request Package Contents Guide ................................ A-1 Exhibit B Example of SAR Review Checklist ......................................................... B-1 Exhibit C Site Survey Checklist ........................................................................... C-1 Exhibit D Checklist for Surplus Procurements ...................................................... D-1

TABLES

Table 4.1 Reverse Engineering Process…………………………………………………………… 4-1

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CHAPTER 1

General Information

The Competition in Contracting Act (CICA, Public Law 98-369 and 10 United States (US) Code 2304), the Encouragement of New Competitors (10 USC 2319), the Federal Acquisition Regulation (FAR) Part 6 (Competition Requirements), and Defense Federal Acquisition Regulation Supplement (DFARS) Part 206 (Competition Requirements) prescribes the policy and procedures that are to be used to promote and provide for full and open competition, with some exceptions. As defined in FAR 2.101, “full and open competition, when used with respect to a contract action, means that all responsible sources are permitted to compete.

Public Law 108-136 amended 10 U.S.C. 2319 to establish that the head of a design control activity (DCA), rather than the contracting officer, is responsible for determining that Critical Safety Items (CSIs) or prospective CSI suppliers meet or could meet requirements. It also directed that the Secretary of Defense establish regulations stating that the head of a design control activity for aviation CSIs establish processes to identify and manage the procurement and Repair, Overhaul, Modification, and Maintenance (ROMM) of aviation CSIs, that the head of contracting activities enter into a contract only with sources approved by the design control activity, and that CSIs be accepted only if they meet all technical requirements established by the design control activity. In this Handbook the term ‘Engineering Support Activity’ (ESA) is synonymous with the term DCA.

FAR Part 9 (Contractor Qualifications) and DFARS Part 209.270 (Aviation Critical Safety Items) prescribe policies, standards, and procedures on contractor qualifications and Aviation Critical Safety Items.. The processes described in this Handbook focus on Source Approvals other than Qualified Products List (QPL) items and are intended to ensure that suppliers are capable of consistently producing and/or providing high quality, conforming items that meet design and manufacturing or ROMM requirements.

To implement the aviation CSI Public Law, the military Services and defense agencies worked together to develop an instruction under the auspices of the Joint Aeronautical Logistics Commanders, now called the Joint Aeronautical Commanders’ Group (JACG).

The JACG is an organization comprising the highest levels of leadership from each Service’s aviation acquisition community and representatives from Defense Logistics Agency (DLA), Defense Contract Management Agency (DCMA), Federal Aviation Administration (FAA), National Aeronautics and Space Administration (NASA), and Department of Homeland Security. The CSI Instruction was issued by all Services and defense agencies under their respective regulation structures. Specifically, it was issued as SECNAVINST 4140.2, AFI 20-106, DA Pam 95-9, DLAI 3200.4, and DCMA INST CSI (AV) “Management of Aviation Critical Safety Items”, and is hereafter referred to as the http://www.dscr.dla.mil/ExternalWeb/UserWeb/AviationEngineering/TechnicalOversight/Documents/CSIInstru7Feb05Clean.pdf� http://www.dscr.dla.mil/ExternalWeb/UserWeb/AviationEngineering/TechnicalOversight/Documents/CSIInstru7Feb05Clean.pdf�

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Multi-Service/Defense Agency CSI Instruction. To supplement the instruction and provide implementing guidance regarding management and approval of sources for aviation parts, the JACG also sponsored the development of the Aviation Critical Safety Item Management Handbook as well as this Sourcing Handbook. Additionally, a set of Frequently Asked Questions (FAQs), including some which refer to sourcing, can be found in Appendix III of the JACG Aviation CSI Handbook.

For the purpose of this handbook, the Aircraft Airworthiness Authority for each respective service is the Naval Air Systems Command, Assistant Commander for Research and Engineering (AIR-4.0) for the Navy; US Army Aviation and Missile Command (RDMR-AE) for the Army; and the Technical Airworthiness Authority for the Air Force. The term Aircraft Airworthiness Authority is synonymous with DCA and ESA for the Army and Navy. For the Air Force, the terms DCA and ESA are synonymous with the Designated Air Force Single Manager for a Weapon System.

1.1 Types of Sources Considered for Approval

Unless otherwise established by the cognizant Service ESA, only sources in the categories listed below are to be considered for approval:

• System or subsystem prime contractor. System or subsystem prime contractors are approved sources for the items in their systems or subsystems, unless specifically disapproved by the cognizant Service ESA;

• Actual manufacturer (i.e., Original Equipment Manufacturer (OEM)) that supplies items to the prime Contractor where the cognizant Service ESA determines the prime Contractor provides no “value added” to the item.

Section 4.7 of the JACG Aviation CSI Handbook provides specific guidance for evaluating OEM’s processes. The Service and DLA logistics organizations and Defense Contract Management Agency (DCMA) assist the cognizant Service ESA in assessing “value added”;

• Fully-licensed manufacturers of the prime contractor or of the OEM that provide substantiation of their licensing arrangement, as validated by and acceptable to the cognizant Service ESA;

• Fully-licensed repair/overhaul facilities of the prime contractor or of the OEM that provide substantiation of their repair/overhaul arrangement with the prime contractor, as validated by and acceptable to the cognizant Service

ESA;

• Distributors approved by the cognizant Service ESA who provide traceability that the items they are supplying were produced by the system prime contractor, OEM, or a cognizant Service ESA-approved alternative source according to technical and quality requirements and are unchanged in any way. Approval of a distributor is based upon the traceability to an approved source and approval of the distributor will be removed from the approved

1-3 source list if the distributor changes their proposed source after approval.

Additional guidance and a possible source of distributor accreditation criteria may be found in FAA Advisory Circular 00-56A, Voluntary Industry Distributor Accreditation Program, which describes a voluntary system for the accreditation of civil aircraft parts distributors for parts and products installed on type-certificated products. Also, ASA-100, Quality System Standard, is a commercially available dealer/distributor approval standard which the FAA determined meets and/or exceeds their accreditation criteria; and SAE AS9120, Quality Management Systems - Aerospace Requirements for Stocklist Distributors, a commercially available standard which includes ISO 9001:2000 quality management system requirements and specifies additional requirements for a quality management system for the aerospace industry and is applicable to stocklist distributors;

• Sources identified on a Qualified Products List (QPL), Qualified Products Database (QPD) or Critical Item Procurement Requirements Document (CIPRD) where the cognizant Service ESA coordinated on the approval.

- QPLs for Federal and Defense specifications and standards can be accessed at http://assist.daps.dla.mil/quicksearch/fsc_quicksearch.cfm.

Type “QPD” in the title box and select the Federal Supply Classification (FSC) for the item of interest from the dropdown list. From the resulting list of QPLs, select a specific QPL for additional information.

In the resulting “Overview” block, click on the “Qualification” link for a list of applicable part numbers (P/Ns) and national stock numbers (NSNs) (if applicable). Select a P/N and the QPL sources for that P/N will be displayed.

- Contact your DLA engineering support (Form 339) focal point for access to CIPRDs.

• Sources identified on source controlled drawings are considered approved, unless determined by the cognizant Service ESA to be otherwise. See Service-specific policy/guidance for further details on how sources listed on source controlled drawings should be managed. (See Section 1.4, below, for further discussion of sources identified on control drawings.) Any additional quality assurance provisions established by the ESA for these sources or situations must be incorporated in contracts;

• Sources controlled within ESA approved Qualified Supplier List programs for standard parts identified as Critical Application Items (CAIs) or Non-Critical, when approved by the ESA. These programs shall, as a minimum, take into account the requirements of Section 7.4 of the JACG CSI HB to insure that hardware complies with technical requirements. This includes the areas of Quality Management, Document Control, Purchasing Control, Traceability, Lot Control, Manufacturing Process Control, Inspection, Test Control, Calibration Control, Corrective Actions & Control of Non-conforming Material, Storage/Packaging/Shipping, Internal Audits, Personnel Training/Qualification, Records Control & Retention, and Product Control. Qualified Supplier List http://assist.daps.dla.mil/quicksearch/fsc_quicksearch.cfm�

1-4 programs will define a list of approved vendors, both manufacturers and their authorized distributors, who will be the only qualified suppliers of competitively procured CSI hardware. Only material manufactured by qualified manufacturers will be acceptable from qualified distributors.

Qualified Supplier List programs for standard hardware shall require the review of a manufacturer’s and/or authorized distributor’s quality system, on-site surveys and regular and recurring audits to verify day-to-day implementation of the quality system, and evaluation of test results for CSI hardware.

• Alternate sources (which may include FAA certificate/approval holders or organic government facilities) for CSIs or CAIs approved by the cognizant Service ESA or its delegate. (See the Multi-Service/Defense Agency CSI Instruction for CSI and CAI definitions.) Non-critical items may require cognizant Service ESA approval according to Service-specific policy. This category includes distributors who are making changes (such as adding Item Unique Identifications) to new items (used or surplus items are not considered within this category). Source Approval Request (SAR) packages from these prospective distributors must obtain the unmodified parts from approved sources and/or provide all SAR package documentation required to obtain approval for that source, in addition to the documentation required for the modifications they are performing; and

• Sources proposing to supply items based upon reverse engineering, Parts Manufacturer Approval (PMA) test and computation, or similar techniques must be approved by the cognizant Service ESA regardless of criticality to ensure that the alternate proposed design is validated. Alternate items SAR process is discussed more in Chapter 3.

Note: Sources proposing Reengineering efforts are not applicable to this document. See Section 1.9.

1.2 CSIs from Unapproved Sources in Existing Inventory

On occasion, CSIs from an unapproved source are found in the supply system. In this case, the Integrated Materiel Manager (IMM) will freeze stock and notify the cognizant Service ESA(s). The cognizant Service ESA(s) will define testing requirements to verify that the product conforms to technical requirements and will review and approve the results. If a critical characteristic exists that cannot be tested in the item or assembly’s final form, the item is unapproved (e.g., Non-destructive test (NDT) on bare metal but the item is coated or painted), unless otherwise approved by the ESA for use. For unapproved CSIs that have already been installed, operational performance history should be considered in determining whether or not to allow continued use of the installed items. Testing requirements for CSIs from unapproved sources are addressed in Section 4.9.3. of the JACG Aviation CSI Handbook.

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1.3. Other Services’ Approved Sources (Source Reciprocity)

In addition to promoting commonality and consistency in procedures, terminology, and standards, SAR policies and guidance also present opportunities for efficiency and cost effectiveness across the military Services. For example, the Multi-Service/Defense Agency CSI Instruction encourages each Service to recognize sources of common use CSIs that have been approved by other Services, particularly where approval procedures are comparable and the basis for initial approval is available to other Services. This is known as source reciprocity. Sources approved by one Service for items that are common use items should be recognized across all Services provided:

• the defined item requirements meet the most stringent requirements required of the item by any Service (as determined by the cognizant Service ESA for assigned items);

• the source approval requirements of the original approving Service were comparable to or greater than those required by each Service;

• each cognizant Service ESA had an opportunity to review all information supporting the request for approval and the determination that the source was acceptable and each cognizant Service ESA concurred with the conclusions; and

• there is compliance with the procedural requirements of the Multi- Service/Defense Agency CSI Instruction.

Other Service ESAs should consider waiving First Article Test (FAT) or Product Verification Audit (PVA) requirements for the same item from the same product/ROMM supplier if the supplier meets source reciprocity requirements (refer to Section E.2.f of the Multi-Service/Defense Agency CSI Instruction) or if FAT or PVA was performed and found to be acceptable within the past 3 years by the cognizant Service ESA.

1.4. Sources Identified on Control Drawings

Control drawings are used to establish an item’s technical design and performance requirements and to identify suppliers that were determined to be capable of meeting these requirements at the time the drawing was released or updated. There are several types of Control Drawings, including Source Control Drawings, Vendor Item Drawings (also called Vendor Item Control Drawings), Specification Control Drawing, and similar variations. Control drawings can be used as a basis to develop, find, or help qualify new sources when appropriate.

Suppliers listed on source control drawings were considered capable of manufacturing the item at the time the drawings were released and are generally considered

1-6 approved, unless the cognizant Service ESA determines otherwise. Refer to Service-specific guidance on how source controlled drawing suppliers are to be managed.

However, suppliers listed on vendor item drawings and specification control drawings are suggested sources of supply (reference ASME Y14.24, Types and Applications of Engineering Drawings) and therefore need to submit a SAR package. Unfortunately, the terminology is not always used consistently across industry.

Sources listed on control drawings may not be current or continue to be valid.

Drawings are not always updated simply to add, modify, or remove sources if there is no technical change to the item itself. As a consequence, suppliers listed on control drawings may no longer be in business, may no longer have an interest in or capability to produce the product, may have experienced quality problems, may not be cost effective, or may not be able to meet schedule timelines. Therefore, procuring activities should validate that:

• available source control drawings are the most current version;

• listed suppliers are still in business and will produce the item;

• the system prime contractor, major subsystem contractor, or OEM for the item still approve the source(s); and

• all system prime contractor, major subsystem contractor, or OEM approved sources are listed on the source control drawing.

If the procuring activity discovers that there is a system prime contractor, major subsystem contractor, or OEM approved source(s) other than those on the source control drawing, then ESA should evaluate for possible approval.. If sources other than those listed on the source control drawing are approved, then an Engineering Change Notice (ECN) or Engineering Order (EO) must be created for the drawing in question to identify the new source for the source control drawing. Then the item’s Acquisition Method Suffix Code (AMSC) remains “B.” This code denotes that acquisition of the part is restricted to the OEM and/or source(s) specified on the ‘source control,’ altered item,’ or ‘selected item’ drawings. (See DFARS PGI 217.7506 SPARE PARTS BREAKOUT PROGRAM for proper code to apply and Section 3.5.1 for additional information regarding source controlled drawings.) If sources other than those listed on the control drawing need to be found or approved, proprietary information contained on the drawing will not be released. The ESA should additionally consider whether any additional technical data is required to approve a new supplier for a source controlled item.

1.5. Historical Sources of Supply

When a legacy item is determined to be CSI, historical sources of supply (i.e., sources that supplied the item prior to the CSI designation) of that item may be affected if the item had been previously purchased and is currently in the supply system. Before designating a legacy item as CSI, the cognizant Service ESA should determine whether

1-7 these historical sources are to be retained. For CAIs, a similar approach may be applied on a case by case basis.

If the legacy item is a common use item, the disposition of historical sources should be coordinated among the user communities via the Common Use Item Coordination Process described in Section 2.5.2 of the JACG Aviation CSI Handbook. If proper coordination is not accomplished in advance, the cognizant IMM will typically freeze stock from unapproved sources. In cases where materiel from unapproved sources of supply is in the supply system, a course of action will be jointly developed by the IMM, cognizant life cycle managers, and cognizant Service ESAs in order to maintain airworthiness while minimizing operational impacts.

When reviewing historical sources for a newly identified common use CSI, the cognizant Service ESA should identify whether other Services may have approved sources for the CSI and consider implementing source reciprocity discussed in Section 1.3, above. If the criteria for source reciprocity are satisfied, the cognizant Service ESA should consider waiving full source approval requirements. This guidance is based on the growing degree of similarity among the Services' source approval processes promoted by the Multi-Service/Defense Agency CSI Instruction, Section E.2.a., and this Handbook.

If the source meets the reciprocity requirements in Section 1.3 and no additional technical requirements are required, also consider waiving FAT or PVA requirements.

1.6. Local Purchase and Repair

A local purchase is the direct purchase of an item covered by the Department of Defense (DoD) Coordinated Acquisition Program (DFARS 208.70) by other than the organization assigned Coordinated Acquisition contracting responsibility or IMM responsibility. A local repair is a repair performed by a maintenance level not normally authorized to perform the repairs for an item. Local purchase or repair of CSIs is only authorized if justified by unusual and compelling urgency (as described in FAR, Part 6.302-2, Unusual and Compelling Urgency, and DFARS Part 208.7003-1, Assignment Under the IMM) and when approved by the cognizant Service ESA. When any Federal Logistics Information System (FLIS) cataloged items are procured locally, the buying activity must notify the cognizant IMM and comply with all ESA-approved CSI procurement requirements, including use of approved sources and restrictions on use of surplus material. Facilities performing local repairs must notify the cognizant IMM and comply with all ESA-approved CSI repair requirements.

1.7. Service Depots and Other Government Facilities

Service depots and other Government facilities are authorized to manufacture CSIs under certain conditions. Specifically, they may be sources for routine, repetitive, 1-8 production lot manufacturing of CSIs only if the cognizant Service ESA confirms they meet all alternate source qualification requirements.

Depots and other Government facilities are also authorized to manufacture CSIs in limited quantities (one or a few) on a “one-time basis” without undergoing the full alternate source qualification process only if certain conditions and criteria specified in paragraph E.2.j.(2) of the Multi-Service/Defense Agency CSI Instruction have been satisfied.

Government manufacture of CSIs on a one-time manufacture basis and via alternate source qualification is discussed in detail in Chapter 7.

1.8. Sources of Surplus Materials

In some instances, purchase of surplus material may be the most efficient and cost effective means to meet a requirement for an item. As used here, the term surplus material refers to items originally purchased and accepted by the Government and subsequently sold or disposed of by the Defense Reutilization and Marketing Service

(DRMS).

Note: Use of surplus parts for routine procurement increases the risk of receiving counterfeit parts.

When offers for surplus CSI material are received, the cognizant Service ESA will evaluate the offer and determine if the material is acceptable for use. Service-specific direction and guidance on surplus offers should be applied. Unless otherwise specified by cognizant Service ESA, the following factors must be considered:

• Origin of the materials

- the proposed item was originally manufactured by an approved source at the time of manufacture and the manufacturer’s approval for that item has not subsequently been revoked

• Traceability, including manufacturing records

• Condition/Configuration

- the item is the correct revision

- the item is unused in any way

- the item is not repaired, recycled, remanufactured, reconditioned, or has not been previously dispositioned as nonconforming by the system or subsystem prime contractor, OEM, other supplier or the Government

- the item fully conforms to all critical characteristics as identified in item technical data requirements, contract, or other cognizant Service ESA instruction

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- the remaining shelf life or other time critical aspects of the item are acceptable to the cognizant Service ESA

• Cost of test & evaluation to determine acceptability

- the test & evaluation cost should be provided to the IMM for additional evaluation to determine acceptability

• Availability of technical data and testing facilities

See Exhibit D for a checklist for surplus procurements and Exhibit G of the JACG Aviation CSI Handbook for an example contract clause for surplus procurements.

For CAI items, the IMM may review an offer for unused material that DLA has not rejected after review where the item:

• is traceable to an original government contract number,

• the parts are in the original unopened packaging,

• the items were manufactured to the current configuration of tech data,

• there is no history of Product Quality Deficiency Reports (PQDRs), and

• the items do not have a current demilitarization (DEMIL) code of C, D, E, F and

G.

However, if the above conditions are not all met, then the ESA must review the surplus offer. For non-critical items, the IMM will request and validate surplus documentation as applicable to the requiring Service or Agency procedures.

1.9. Reverse Engineering and Reengineering

1.9.1 Reverse engineering is the process of replicating an item in all respects (i.e., functionally, dimensionally, materials, and processes) by physically examining and measuring existing items to develop the technical data (physical and material characteristics) required for competitive procurement. Normally, as part of a product development plan, reverse engineering will not be cost effective unless the items under consideration are urgently needed to maintain operational readiness, are of a high dollar value, or are procured in large quantities. The decision to pursue a government funded reverse engineering effort must be authorized by both the head of the contracting activity and the cognizant Service ESA, following the direction issued by DFARS, Part 217.7504, Acquisition of Parts When Data Is Not Available. Coordination among the Services is required when reverse engineering common use items. (See Chapter 4 of this Handbook and Section E.3.h of the Multi- Service/Defense Agency CSI Instruction for further discussion of reverse engineering requirements.)

Reverse engineering may be considered if the following criteria are met:

• There is an overwhelming readiness need and all other methods of support are unavailable or prohibitive, 1-10

• a Business Case Analysis demonstrates cost savings commensurate with potential safety or performance risk,

• the government must be in possession of sufficient data or be provided sufficient data to perform a risk assessment or assess the reverse engineered design.

A review by the appropriate engineering personnel is required when considering reverse engineering. Representatives from the impacted program office and/or the procuring activity may also be necessary for configuration and funding concerns when conducting the above analysis.

1.9.2 Reengineering is the process of examining and measuring an existing item to develop a new design that is identical in fit, but allows the form to be modified to result in equivalent or improved overall functionality of the item or other quantifiable benefit (e.g., reduced cost, ease of maintenance, improved supply base, etc.)

Because reengineering is the process of establishing a new design, it does not fall under the source approval process. The new design should instead be qualified under the engineering change process. Due to the inherent risk associated with the reengineering process and the safety concerns related to CSI components, reengineering should be entered into as a last resort.

1.10. Parts Manufacturer Approval (PMA) Source of Supply

Title 14 of the Code of Federal Regulations (14 CFR) 21.303(a) requires that any person producing replacement parts for sale for installation on a type-certified product must have a PMA. A PMA is a combined design and production approval for replacement parts for FAA certified aircraft.

PMA parts cannot be automatically approved for use in military applications because the Military Services’ operational environment, maintenance procedures, flight envelope, and similar factors may be different from those for the same parts in the civil sector.

Therefore, source approval requirements apply to components produced by FAA PMA holders for the government.

The FAA approves PMA sources on the basis of one of three principles:

• Identicality with a Licensing Agreement - The license agreement is proof that the design of the part is the same in every respect as a part approved under a type certificate.

• Identicality without a Licensing Agreement - The source must prove that their part and the data used to manufacture the part are identical to the OEMs part. The source proves identicality by providing the OEMs data, which verifies identicality in dimensional and material characteristics, special

1-11 processes and coatings, and any other test and acceptance criteria.

Identicality to another PMA is not allowed per FAA regulations.

• Test and Computation - The source must demonstrate that the functional design of the proposed part is at least equal to that of the original type certified (TC), supplemental type certificate (STC), or technical standard order (TSO) approved original part. The source provides to the FAA part design data, including materials, processes, test specifications, system compatibility, maintenance instructions, and part interchangeability, as well as a test and substantiation plan to show part airworthiness. More Service/Agency CSI reverse engineering considerations are provided in Chapter 4.

See the FAA Order 8110.42C, Parts Manufacturing Approval Procedures dated 23 June 2008 for more FAA PMA information.

http://rgl.faa.gov/Regulatory_and_Guidance_Library/rgOrders.nsf/0/D1D550BBC2C82D D386257472005724EF?OpenDocument

Approved PMA parts may require new part numbers regardless of how the PMA part was developed because a vendor will not be asking to produce a part to the OEM blueprints, but rather to their own manufacturing data. This will not apply to parts produced under license agreement as these parts are identical to the OEM blueprints.

However, parts produced without license agreements or developed through reverse engineering may have their own unique part number, (PMA parts may use the same part number with the OEM permission) requiring unique configuration control (though they can be linked under a single stock number). As creation of a unique part number will require cataloging to maintain configuration control, a cost analysis must be performed before technical evaluation of a PMA source is undertaken. Cost analysis must be performed between the IMM, procuring activity (if different), and the cognizant Service ESA before technical evaluation of a PMA source is undertaken to ensure all activities involving cost are considered.

While the PMA process is a FAA process, it may not be used as a sole basis for source approval for government used items not covered by a FAA Type Certificate. PMA holders requesting to be approved for non-type certified parts used by the government will need to apply for approval per the requirements of Exhibit A.

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Chapter 2

Procuring Activity Responsibilities in Source Management

Procuring activities perform the following source management activities:

• Ensure that all contracts for CSIs are in compliance with all sections of this handbook as all CSIs require source approval unless the requirement is waived by the cognizant Service ESA.

• Ensure contracts for items requiring source approval are awarded only to approved sources unless the requirement is waived by the cognizant Service

ESA.

Note: Requirements on Active Solicitation. Due to time constraints and lead times involved, the Government cannot guarantee expedited processing of SARs submitted in response to a solicitation announcement in the Federal Business Opportunities (FedBizOpps). Once a solicitation appears in the FedBizOpps, there may not be enough time to process a SAR for the current solicitation.

Pursuant to FAR 9.202(e), the contracting officer is not required to delay a proposed award to provide a potential offeror an opportunity to demonstrate its ability to meet the standards specified for qualification. However, the cognizant Service ESA must still review the package so that if approved, the source will be eligible for future contract awards.

There are items requiring source approval for which the Government does not own the technical data that specifies the manufacture or ROMM, or the data that the Government owns has not been maintained. Sources for these items must be limited to the prime, OEM, or an alternate supplier identified by the prime or OEM, as approved by the ESA.

• Ensure contracts contain all technical and quality requirements stipulated by the cognizant Service ESA.

• Review quality performance history of CSI approved sources prior to award to identify indicators of potential problems needing investigating prior to contract award.

• Review quality history of CSI NSNs to identify indicators of potential technical documentation problems with the item.

• Ensure the supplier is not on the excluded parties list system (https://www.epls.gov/) or other internal problem-tracking system.

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Chapter 3

Source Approval Requests (SAR)

Source approval requirements and processes addressed in this Handbook are not intended to restrict competition, but rather to ensure that proposed sources are capable of consistently producing acceptable items while increasing competition for manufacturing source approved items in addition to ROMM of items. These processes are also used to qualify sources in cases where the pre-approved sources (e.g., the prime contractor and/or OEM) will no longer produce a quote.

A Source Approval Request (SAR) contains information about a prospective new supplier. A SAR package includes all the technical data needed to demonstrate that the prospective supplier can competently manufacture or perform ROMM of the item requiring source approval to the same level of quality or better than the system prime contractor, major subsystem contractor, or OEM.

Suppliers that have not been formally approved by a cognizant Service ESA to directly supply specific CSIs to the Government are required to submit SAR packages. These contractors are considered alternate sources. System prime contractors, major subsystem contractors, and OEMs are not required to submit SAR packages to the Government in order to qualify a prospective subcontractor, unless otherwise required by the ESA.

3.1. SAR Risk Management

When the Government assumes responsibility for direct procurement of items requiring source approval and/or CSIs, from sources other than the prime contractor, the Government assumes certain risks. In effect, the Government is responsible for the risk, not the prime contractor.

Cognizant Service ESAs should analyze the technical risk of direct procurement from a source other than the prime contractor and determine/verify the qualification requirements and Quality Assurance (QA) requirements needed to reduce that risk to an acceptable level. (See the Multi-Service/Defense Agency CSI Instruction, Section E.2.a (7). Risk analysis includes but is not limited to assessment of the following elements:

• The criticality and complexity of the manufacturing, ROMM and inspection processes that are required to support production/repair of the item. Failure Modes, Effects, and Criticality Analysis (FMECA) data may aid in the determination of critical processes and characteristics, and the sensitivity of the processes to the techniques and skill level of manufacturing personnel;

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• The item’s critical characteristics, required QA controls, and qualification requirements;

• The design life limits and expected service life of the item;

• The quality history for the component;

• Prime contractor’s "value-added" in the manufacturing or ROMM process;

(Value added is defined as any oversight, process, operation, or technical data provided by the prime contractor that would have to be replaced by the Government. Examples include: QA; supply of raw material and forgings;

providing data not shown on component drawings such as machining, feed rate and cutting speeds, machining impacts, casting/forging information, design life, etc.; Material Review Board (MRB) disposition; material and process specifications; special tooling and fixtures; master tooling calibration;

and providing personnel at the subcontractor's facility to perform engineering and quality management services.);

• Availability of any special equipment, tooling, fixtures, and/or jigs; (This information may be obtained from the cognizant DCMA representative.);

• Review of upcoming design changes through Engineering Change Proposals (ECPs), changes in design, the component improvement program, and engineering development program.

3.2. SAR Development and Contents

A SAR should include all data required to manufacture or ROMM, and describe the item;

indicate if the proposed source has ever (and if so, when they last) supplied the subject or similar item to the prime contractor, OEM, civil sector, civil agencies, foreign governments, or the DoD.

If the service or agency desires to target items with the largest potential for savings through competition, the procuring activity can develop a target list to determine where to focus the effort. If a Service or Agency decides to develop a target list, this does not preclude a potential source from submitting a SAR package for a particular item. A procuring activity can develop a target list of potential items for which establishment of an alternate source(s) would be in the best interest of the government. This target list can be used to focus development of SAR packages to increase the number of sources for items where there is potential for benefit.

The procuring activity informs all interested suppliers of basic qualification criteria by providing them with the requirements for source approval. Exhibit A provides the minimal contents for a SAR package as well as detailed guidance to contractors on how to assemble a SAR package that will satisfy the requirements for each Service/Defense Agency. In addition to these requirements, an individual Service or DLA may require additional content. The websites for this information are included in Exhibit B of the JACG Aviation CSI Handbook. Meetings with suppliers to answer their specific questions

3-3 relative to the approval process for alternate sources may also be conducted by the procuring activity. The individual Service or DLA should consider including DCMA as a source of information and data for the ESA decision process. SARs from potential sources (and DLA Form 339 requests when SARs are submitted to DLA) are routed to the cognizant Service ESA for review and disposition.

The cognizant Service ESA will consider all SARs for potential approval. Based upon individual Service procedures, the cognizant Service ESA may determine that certain sections of the SAR are not required for their review; however, legal precedents require that all SAR packages be processed consistently. Therefore, if a section is excluded, a statement as to why must be included within the SAR. A SAR for the manufacturing of an item is similar to a SAR for ROMM of an item; further detail is provided below in Section 3.5.2 below.

3.3. Integrated Materiel Manager (IMM) Responsibilities

The IMM is the activity or agency that has been assigned wholesale integrated materiel management responsibility for the DoD and participating Federal Agencies. Each Service/Defense Agency has multiple IMMs. The applicable IMM for a given part is identified by the Source of Supply (SOS) code recorded in the Federal Logistics Information System (FLIS).

• The IMM responsibilities include cataloging, requirements determination, procurement, distribution, overhaul, repair, and disposal of materiel.

3.4. SAR Review

The cognizant Service ESA’s review of a SAR focuses on adequacy of technical data, proper identification of critical characteristics (if identified by the cognizant Service ESA), capabilities of manufacturing or ROMM process sources/sub-tier suppliers, proper definition of qualification requirements to ensure equivalent performance of items, identification of Quality Assurance requirements, and verification of Government/Contractor testing capabilities. The cognizant Service ESA will also assess the capability of the prospective source to manufacture or ROMM and deliver the item in accordance with technical requirements. As part of this process, the Service, DLA logistics organizations, and DCMA may provide assistance or information to the cognizant Service ESA in assessing the capabilities of the supplier in the manufacture or ROMM of items requiring source approval.

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3.4.1. Cognizant Service ESA Responsibilities

The cognizant Service ESA is responsible (unless otherwise stated in Service-specific guidance) for receiving SARs, tracking and evaluating SARs for their activity, and returning the SARs to either the procuring activities or the supplier (as applicable), ensuring at all times that precautions are taken to prevent access by unauthorized personnel to any proprietary data in the packages.

The cognizant Service ESA may require support from a variety of specialists, to include but not limited to quality assurance, reliability and maintainability, manufacturing and production, technical disciplines, logistics, and configuration management. The engineer reviews the SAR and any comments from assigned specialists and evaluates the engineering characteristics of the part, design change activity, field experience with the item, and the source’s quality assurance and manufacturing and/or ROMM history with the item. It is important to ensure that precautions are taken to prevent access by unauthorized personnel to any proprietary data within the SAR package. The engineer then reviews the available information, assesses the risks, and makes the approval or disapproval decision. Normally, the SAR review process must be accomplished within 180 days, unless otherwise negotiated with the procuring activity or as documented in Service specific guidance. The cognizant Service ESA is responsible for the SAR review, considering the comments provided by any other reviewers, assessing the risks, and approving or disapproving the new source based on their technical justification. When a new source (for either manufacturing or ROMM) is approved, it is important that it be added to the Service’s listing of approved sources.

In addition, the cognizant Service ESA is responsible for tailoring the Quality Assurance Provisions (QAP) to the specific requirements of the SAR item during the SAR review or at contract award. While QAPs and contract data requirements lists (CDRLs) can be tailored for each items requiring source approval, it is important that different suppliers of the same part follow the same QAPs and CDRLs. Refer to Service-specific guidance for a detailed definition of engineering responsibilities for SAR QAP and CDRL requirements.

Contact your Service CSI point of contact (POC) (listed in Section 1.6 of the JACG Aviation CSI Handbook) for information about your cognizant Service ESA focal point.

3.5. Technical Review

The objective of the technical review is to determine whether the proposing supplier has the capability to consistently produce the item to the required specifications, and to ensure that the available technical data is adequate to manufacture or ROMM the required item. (Note: If the technical data to be used are not owned by the Government, the prospective source must provide certification that authorizes use of

3-5 the proprietary data). The cognizant Service ESA determines and verifies the minimum qualification requirements and the QA requirements that proposing suppliers must meet in order to manufacture or ROMM a specific item for the DoD. Consideration should be given to contacting DCMA as a source of information concerning QA requirements based on current knowledge of the proposing supplier's capabilities. The approval decision should consider both supplier capability and risk. Supplier capability is evaluated based on the SAR review. Risk is evaluated utilizing Section 3.1 above.

The SAR technical review covers three broad functional areas: engineering, manufacturing/repair/overhaul processes, and quality assurance. The technical review is the final decision point for determining whether a source can produce a conforming item requiring source approval from the available technical data. A checklist for use as a guide for the technical review of a SAR package is provided in Exhibit B.

3.5.1. Engineering Review

3.5.1.1 Drawings. Drawing reviews are conducted from a manufacturing or ROMM perspective to determine if the SAR contains data of sufficient quality to allow a competent supplier to manufacture or ROMM items that will be of equal or better quality to those previously procured. Often times, the government owns the data rights for drawings, and thus the drawings being used by the proposed supplier were provided by the procuring activity. To ensure that the data provided is satisfactory, the following sequential steps are performed by the cognizant Service ESA to review a drawing.

3.5.1.1.1 Perform a top-down breakdown of the item to identify all required drawings, parts lists, specifications, etc. Note that each prime contractor or PMA holder will have unique drawing practices specific to their designs.

3.5.1.1.2 Determine that all sheets of each drawing are included and are current and legible.

3.5.1.1.3 Determine if all identified detail and subassembly drawings, to include drawings for forgings and castings if applicable, parts lists, etc. required to manufacture and test the item are contained in the SAR. If the SAR is for an assembly, verify interface of components for form and fit.

Note: Suppliers may only use the prime contractor or DoD approved forging or casting sources for specific forgings/castings.

3.5.1.1.4 Determine if all required drawings for special/master tools and/or fixturing are referenced in the SAR.

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3.5.1.1.5 Ensure the cover pages of all required prime contractor or OEM specifications are included, or if other than Prime/OEM specifications are being used (e.g. PMA holder, alternate item, etc.), then complete specifications need to be provided.

3.5.1.1.6 Verify that ALL important processes, tests, and inspections (for examples of important processes, tests, and inspections, see Exhibit C of the JACG Aviation CSI Handbook) are called out in the drawing package by reference to specifications and that suppliers for these…