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PLAINTIFFS' LIABILITY CONTENTIONS AGAINST VALUJET

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COUNTERFEIT PARTS
DEFINEDRISK FACTORSHISTORYWHAT IS BEING DONEFAADODIMPACTWHO PAYS
COUNTERFEIT PARTS
What is a counterfeit part?Some examples:Type of Unapproved partDeliberately misrepresented as FAA approvedImitation, not original or genuine
COUNTERFEIT PARTS
What is a counterfeit part? (cont’d)Approved work that is not airworthy but altered and misrepresented as acceptableUsed components represented as newParts from an unapproved manufacturer represented as manufactured by approved source
COUNTERFEIT PARTS
Unapproved Parts InvestigationBrokers that falsify parts certificationsRepair stations that do unauthorized repairsManufacturers that produce unlicensed partsWorkers who sell stolen, surplus, or used parts


Health and SafetyPerformance IssuesQuestionable ReliabilityLower Life ExpectancyEarly Part FailureHigh Repair CostsCatastrophic Failure
RISK FACTORS

HISTORY


2011 Senate Armed Services Committee1,800 Cases of Counterfeiting~1,000,000 Counterfeit Parts2016 GAO Report to Congressional Committees on Counterfeit PartsFiscal Data Analyzed$4.7m Parts at cost of $96B
WHAT IS BEING DONE?
FAA:July 2016 Advisory Circular- Provide Guidance for SUP-Supplier Evaluations-Procurement Process-Receiving Inspection
WHAT IS THE DOD DOING?



AUGUST 2016 FINAL RULEAmend DFAR 252.246-7007 (Contractor Counterfeit Electronic Part Detection and Avoidance System)New Clause DFAR 252.246-7008 (Sources of Electronic Parts)Mandatory Flow Down Provisions
FLOW DOWN
Inserted into contract with sub-contractorsIf counterfeit work is discovered, seller liable for all direct costs to remove, replace, re-install, and test
IMPACT



CA Company issued cease and desist – Unapproved FAA PartsTexas Company, without PAH, over the course of 4 years, sold aircraft galley equipmentCA Company produced and sold unapproved Boeing Bushings for the last 10 yearsTexas Company mount UAT with unapproved internal Commercial GPS unit
WHO PAYS?
Economic costsRemovalReplacementTestingLoss of Use of AircraftOther Consequential Losses
SAFETY FACTOR
- Past 10 years FAA records show at least 170 reports involving 17 different commercial air carriers involving unapproved parts in inventory and on aircraft-2015 Investigation into incident of hard landing in NJ as a result ofunairworthytail rotor driveshaft tube represented as airworthy
SAFETY FACTOR
11/20153d Cir. Confirmed conviction of maintenance company, owner and mechanic for fraud involving aircraft parts and inspectionsAvoid tragedies such asNorwegianConvairairlinercrashedat sea in September 1989, killing 52 people, after its tail fell off in flight. An unauthorized part was heldresponsible
GOALS
Mitigate Potential Safety RiskMinimize Economic Losses

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PLAINTIFFS' LIABILITY CONTENTIONS AGAINST VALUJET