GWBAA Nees Your Input for 2011 - Greater Washington Business

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GWBAA Nees Your Input for 2011 - Greater Washington Business Powered By Docstoc
					                                                                               c/o 10761 James Payne Ct.
                                                                                     Manassas, VA 20110
                                                                                           (703) 361-8253

                                        January 24, 2011

             GWBAA Needs Your Input For 2011
2011 Events Survey
GWBAA would appreciate member feedback as we start to plan events for the next year (and,
of course, volunteers to help organize the events is always appreciated). We have posted a
short survey at which asks about both topics for the
annual safety standdown (i.e., are Crew Resource Management or survival training matters of
interest?) and for other events;

Because GWBAA is a volunteer-run organization, input and new blood is always welcome;
assistance will be needed for upcoming projects – especially for the fourth annual safety
standdown which is scheduled for late in the spring. if you have ideas or want to sign up to help
please send us a message at

Regional News Round-Up
The Pittsburgh Institute of Aeronautics (PIA) has received a $273,000 grant from the
Appalachian Regional Commission to help it establish am aviation maintenance technology
school at Hagerstown Regional Airport. The school will be located at the Top Flight Airpark
facility and will offer training towards FAA certification for airframe and powerplant technicians.
PIA’s goal is to begin classes at the end of April.

The Culpeper Star-Exponent reports that Culpeper Regional
Airport is studying the best way to make new hangar space.
Available. Airport Manager Tonya Woodward indicated that the
airport’s 105 T-hangars are full and there are about 80 names on
its waiting list. The airport advisory committee is discussing a plan
to add 40 additional hangars, but funding is unresolved and
construction would not likely start for several years

In other construction news, the Stafford County-Sun reports that the Stafford Regional Airport
Authority has begun discussions regarding plans for a new 1800-square foot storage building
and 5000-square foot hangar.

If you’re aware of any news of interest to business aviation occurring around the greater
Washington area, please let us know at
                                                                                           January 24, 2011
                                                                                                    Page 2

GUEST VIEWPOINT: Baffled by the Boilerplate?
Managing Expectations at Your Next Service Center Visit
GWBAA is pleased to present the following discussion from Mark Ringel, Esq.:

 “Just sign the front and we’ll fill in the rest later”   But don’t be afraid to get help when you need it.
says the polite young man at the desk. “But               Help can be found from your in-house counsel
what is all this fine print on the back?” you ask.        or risk management personnel, you aircraft
“Oh it’s just standard.”                                  management company, your aviation attorney,
                                                          or your insurance broker. The first step is to
Every time you bring your aircraft to a                   ensure that someone actually reads the
maintenance facility, whether for a routine               language.
check, major maintenance, or a pre-purchase
inspection, you are undoubtedly faced with the            “But I never see the terms until the moment the
maintenance facility’s standard work order form,          airplane arrives.”     For maintenance that is
including at least one page of fine print. On a           scheduled in advance, nearly every service
major maintenance project, the facility may send          center in the country would be happy to send
you the form in advance, but frequently price             you their full terms and conditions when you are
quotes and other proposals have a single line             booking your visit. They may not be attached to
that says something like “Subject to our                  your quote if you don’t ask, but the information is
standard terms and conditions.” So what are               at their fingertips when giving you a proposal. If
these “standard terms and conditions?” Are                the maintenance project is in connection with a
they really “standard?” And what harm is there            pre-purchase inspection (whether you are the
in just signing where you are told?                       buyer or the seller) the terms and conditions are
                                                          likely different, or the maintenance facility will
As lawyers, my colleagues and I are trained to            have additional terms and conditions. The worst
be suspicious of the contents of every                    case is when a contract pilot drops off the plane
document. And the smaller the font, the more              for emergency maintenance and is asked to sign
suspicious many of us become. Over the years              the form upon arrival. Even if that’s the case, be
we have reviewed many of these forms and I am             sure that a copy of whatever he signed is
pleased to report that with a little diligence and a      reviewed, even if after the fact. Many service
good pair of reading glasses, the boilerplate             centers will take the time to discuss terms
language is not to be feared.                             afterward and even, if necessary, make an
                                                          amendment to the document.
You mean I have to read it?
                                                          “OK, I read it. Now what?”
As an initial matter, you won’t know what the
boilerplate language says if you never read it.           So you pulled out your reading glasses and
These are terms that really govern your                   have actually made it through the fine print.
interaction with the service center. They apply           What are “standard” provisions and what should
even if you don’t read them. If someone tells             you be wary of?
you that the terms don’t matter, or that the
service center doesn’t really use those terms, an         It is reasonable for the service center have some
alarm should go off in your head. The terms DO            protection. Fixing, maintaining, and modifying
apply, and you don’t want to read them for the            aircraft is a risky business that can result in huge
first time when there is a problem. “But I’m not a        liabilities. It is not unreasonable that service
lawyer, I’m just a [insert your job title here].”         centers use their legal forms to ensure that they
Whether you are the pilot, the director of                understand the risk to which they are exposed.
maintenance, the CFO or the principal, you                But not all of the terms in this boilerplate are
should ensure that someone reads the terms                liability protection for the service center. What
and, if that someone must be you, even you can            you find may surprise you: some of the terms
read these forms for the potential pitfalls               may actually be good for you. The boilerplate
described below to flag potential major issues.           may be the only place where the service center
                                                                                       January 24, 2011
                                                                                                Page 3

includes a 90-day warranty on the service to be        boilerplate often has terms that deal with
performed, even if you didn’t expect or ask for it.    additional charges.      Above, I mentioned a
Some terms may not be good or bad, just good           charge for consumables. The boilerplate in your
to know. Many service centers charge a small           case also likely says that the customer is
administrative fee for consumables rather than         responsible for all sales taxes; this can be a
billing you for these small items that are difficult   reminder to find out if sales tax is going to apply
to track. The amounts can vary but typically           to some or all of the proposed costs, or if you
would be a few percent of the total price up to a      qualify for an exemption. There may be a fee
cap. As an example, a form I am reviewing right        applied to customer-supplied parts or a markup
now says “3% not to exceed $1,500.” It’s good          on parts purchased from the manufacturer.
to know so that you can avoid a surprise when          Overtime charges can also vary significantly.
you get your final invoice. Then there may be          Some facilities have straight time for only one
terms that create some concern. There are              shift each weekday. Others use straight time for
three major types of issues that merit special         two shifts and maybe even Saturday. These are
attention: inconsistency, price and risk.              all charges that should be clearly understood
                                                       when a project commences in order to allow you
That isn’t our deal…                                   to plan and manage the project properly. For
                                                       example, you should know if pressing the
Inconsistencies between the terms of the               service center to finish up over the weekend will
boilerplate and the proposal are common. You           result in overtime charges or not.
may have negotiated a particular deposit
schedule with the service center before arrival,       Can these additional charges be changed?
but the standard terms include payment                 Sometimes. If the charge for consumables
schedules that are inconsistent. You may have          charges is not capped in the boilerplate, the
negotiated a specific schedule for completion of       service center may agree to establish a cap. A
the work, but the boilerplate says that the            surcharge for a customer-supplied part could be
service center is not responsible for any delays       waived or capped depending on the specific
no matter what causes them. There are some             circumstances of the maintenance and the size
simple ways to resolve these sorts of                  of the project. But none of these items can be
inconsistencies as soon as you identify them.          changed or negotiated until you read them and
Your proposal, right below the line that says “this    understand them.
proposal is subject to the standard terms and
conditions” could get an extra line that says “In      Risky Business.
the event of a conflict between this proposal and
such standard terms and conditions, this               The most daunting of terms in the boilerplate for
proposal shall govern.” Or in the section that         most people are the items that allocate risk.
lists your specially negotiated pricing or delivery,   These terms include the provisions that deal
you could include a simple line that says              with    limitations  on     liability, insurance,
“Notwithstanding any conflict with the standard        indemnities, attorney’s fees, liens, delays, etc.
terms and conditions, the payment terms shall          While these provisions are the hardest ones to
be…” One last caution, if you work for an              review and negotiate, they can also become the
aircraft management company, or you use the            most significant under the right (or wrong)
services of such a company, many management            circumstances. I am not going to suggest that
companies may have existing arrangements               you should ask a service center to delete all of
with certain maintenance providers. You should         these provisions or to rewrite them from scratch
ensure that the terms of any of those special          for a $50 maintenance task performed during an
arrangements        don’t     create     additional    overnight. But these types of provisions should
inconsistencies                                        be reviewed and be fair to both parties.

Price matters.                                         It is typical that a service center insists that an
                                                       owner rely on its hull insurance for a total loss
For a scheduled maintenance event, you may             that happens while the aircraft is at the service
have solicited more than one quote, and made           center. While that may not seem fair in every
your decision, in part, based on price. The            circumstance that you can conjure up, it is
                                                                                      January 24, 2011
                                                                                               Page 4

common. Your insurer knows that it’s common,          While every deal is unique, in most used aircraft
you should know that it is common, and your           transactions, the buyer pays for an inspection to
service center will not likely change this term.      be conducted on the seller’s aircraft. Most
That said, it is not unreasonable for you to          maintenance facilities insist on both parties
expect your service center to take responsibility     signing an agreement acknowledging this
for damage caused to your airplane by the gross       unique arrangement. The terms also often
negligence or willful misconduct of the service       require payment by the buyer for the inspection
center’s employees. Consider two examples: if         up front, rather than after the inspection and any
a tornado wipes out the hangar, your hull             related work has been completed. Sometimes,
insurance is where you seek recovery; however,        the service center will insist on being paid by the
if a service center employee backs a forklift into    seller for any discrepancies before the aircraft
your wing, the service center should fix it. The      departs, even if the seller has a credit line
service center should have hangarkeepers              established. I would caution that you read any
coverage to protect them for these types of           and all of the terms that are unique to pre-
losses. A number of years ago, the boilerplate        purchase inspections carefully with two addition
that many service centers used routinely tried to     things in mind.
push all risk of damage (regardless of cause) to
the owner’s insurance, but our experience is that     First, ensure that the service center’s paperwork
the pendulum is swinging back. In many, if not        matches the business deal for your specific
most, agreements we have reviewed recently,           transaction. If the buyer is responsible for fuel
the boilerplate offered by the service center         during engine runs, ensure that the work order
takes this more fair and balanced approach.           places the responsibility for the cost of fuel on
                                                      the buyer. If your transaction is structured with a
It is also typical that service centers do not want   very specific list of inspection tasks to be
to be responsible for changes imposed on the          performed by the buyer and no other inspections
project by the FAA or other governmental              may be conducted without the seller’s
authorities. Depending on the project, this may       permission, ensure that your workorder or
seem fair or not. If part of the project is seeking   proposal is clear on that point.
FAA approval for a new supplemental type
certificate (or “STC”)        or for a first time     Second, be sure that the document makes
installation of a product or system, both sides       logical sense. Sometimes, despite of the best
should anticipate that the FAA and their              efforts of the service center, the boilerplate
approval process could be unpredictable at best.      terms and conditions won’t match your deal. For
These sorts of terms are really about setting         example, the service center boilerplate language
expectations, and remedies if expectations            may refer to Customer but the proposal is
aren’t met. For a full interior refurbishment, you    drafted using Owner or Seller and Buyer. So
may grant a service center a bit of leeway to get     who is the “Customer?” It is imperative that
necessary approvals. To change a lightbulb,           everyone is clear on which party is being
maybe not. How much leeway is granted is an           referred to in an indemnity, for example. And be
item of negotiation, as is the remedy if the          cautious of language that says “Seller and Buyer
project runs late or finishes early. The key is to    are collectively referred to as Customer.” That’s
understand what the boilerplate says, and             a short cut for the service center but can result
whether it makes sense for the project at hand.       in confusion in the terms and conditions.

Pre-purchase inspections.                             What does it matter anyway?

The one time that most of our clients                 Once you’ve read the boilerplate and the types
automatically review the terms and conditions         of issues described above you may have
provided in connection with service center visit is   lingering questions like these: Does it really
in the context of an aircraft purchase or sale        matter? Aren’t most service centers trying to do
transaction. As mentioned above, the terms and        right by their customers? They wouldn’t really
conditions that apply to a pre-purchase               enforce that term, would they? Wouldn’t they
inspection are often different than or                lose business if they treated their customers like
supplemental to a normal maintenance visit.           that?
                                                                                        January 24, 2011
                                                                                                 Page 5

The answer to all of those questions is “yes.” It       *Mark Ringel is an attorney in the business
does matter. Service centers are not out to get         aviation practice at Crowell & Moring LLP in
you or to offend you, but they really will enforce      Washington, DC. Mark represents a wide range
their terms and conditions, sometimes even if it        of clients on commercial transactions involving
means that a particular customer is upset.              the purchase, sale, lease, financing and
Remember a few things. First, while service             operations of a wide variety of business aircraft.
centers want your business, they need to remain         In addition, his clients include management
in business too. And one of the ways they do so         companies, charter operators, and aerospace
is by limiting their liability. Second, the person      manufacturing companies, and his practice
“enforcing” the terms is not always the friendly        includes providing advice in regulatory
service center manager. It may be the service           compliance issues associated with ownership,
center’s corporate parent or its insurance carrier.     operation and maintenance of aircraft of all
And the insurer will always entertain every             shapes and sizes.        You can find more
alternative under the contract if it means limiting     information about Mark and Crowell’s business
a payment. Confusing or inconsistent terms,             aviation               practice                at
pricing terms and risk allocation are all critical
terms to the business planning of a service
center, and they should be critical terms to you
as well.

FAA General Aviation News
                        The current issue of FAA's bi-monthly publication for general aviation –
                        “FAA Safety Briefing” – is now available from the FAA website, at

                        The issue marks the 50th anniversary of the publication, which began in
                        1961 and until recently was known simply as “Aviation News.” The issue
                        notes the significant advances in GA safety that have been made over the
                        past five decades – i.e., the fatal accident rate per 100,000 flight hours fell
                        from 3.13 in 1961 to 1.33 in 2009, despite the number of active GA aircraft
                        having more than tripled during the same period.

Upcoming Aviation Events
        January 25: Transportation Research Forum luncheon featuring Jeff Shane, former
        DOT Under Secretary for Policy, discussing a bipartisan report on “Beyond Stimulus:
        Towards a New Transportation Agenda for America.” For more information, please visit

        January 26: Aero Club luncheon featuring Secretary of Transportation Ray LaHood at
        the Capital Hilton. For information, please visit

        January 27: FAA Safety team seminar on the WINGS program, short field landing tips,
        and SFRA changes at Martin State Airport at 7pm. For more information, please visit

        February 1-2: ACI-NA/AAAE Washington Legislative Conference at the Hyatt Regency
        Capitol Hill. For more information, visit
                                                                              January 24, 2011
                                                                                       Page 6

       February 5: Seminar on "Real World IFR" at AOPA HQ in Frederick, Maryland. For
       information, visit

       February 8: Air Transport World’s 37th annual airlines industry achievement awards at
       the Renaissance Washington at 7pm.                For more information, please visit

       February 15-16: 36th annual FAA aviation forecast conference. For more information,
       please visit

       February 23: American Bar Association Forum on Air & Space law update conference
       at the Mandarin Oriental Hotel.            For more information, please visit

       March 8: Aviation Week 53rd annual Laureate Awards at the Andrew Mellon Auditorium.
       For information, please visit

       March 15-16: Air Charter Safety Foundation symposium at the NTSB Training Center in
       Ashburn, Virginia. For more information, please visit

       March 23: Seminar on "Close Calls: Lessons Learned" sponsored by AOPA at the
       Hilton   Gaithersburg    at   7pm.        For  more  information,   please   visit

       March 31-April 2: Aeronautical Repair Station Association symposium at the Ritz
       Carlton Pentagon City. For more information, please visit

       April 14: National Aeronautics Association luncheon featuring John Porcari, Deputy
       Secretary of Transportation, at the Crystal Gateway Marriott. For more information,
       please visit

       April 27: 10th annual U.S. Chamber of Commerce aviation summit.              For more
       information, please visit

       May 13-14: 16th Annual Maryland Regional Aviation Conference sponsored by the
       Maryland Airport Managers Association (MAMA) in Easton, Maryland. For more
       information, please visit

       September 21: Seventh annual GWBAA golf tournament at the 1757 Golf Club.

GWBAA Offers Online Benefits
We continue to add member information for GWBAA’s electronic membership directory – This service is available to GWBAA members at no cost.
Please contact Jol Silversmith ( if you want to post your company’s
                                                                               January 24, 2011
                                                                                        Page 7

GWBAA Contacts
GWBAA President Paige Kroner of Chantilly Air ( and GWBAA
Secretary Jol Silversmith of Zuckert, Scoutt & Rasenberger, LLP (
write and edit GWBAA News. GWBAA’s success and ability to make a difference depends on
the breadth of its support and your participation – so please send any ideas or comments for
future newsletters, or for GWBAA, in general, to Paige or Jol.

Under the terms of the Federal CAN-SPAM Act, this e-mail may be considered to be an
“advertisement” or “solicitation.” If you do not wish to receive any further emails from GWBAA,
please send an email to:, with the words “OPT-OUT” in the subject line. The
postal address for GWBAA is c/o Paige Kroner, Chantilly Air, 10761 James Payne Court,
Manassas, VA 20110, (703) 361-8253.

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