WASHINGTON—Boeing failed to meet its obligations in five of 12 areas specified in a 2015 agreement with the FAA that required various safety and quality-control improvements in its Commercial Airplanes division and will pay $5.4 million in new penalties as a result, the FAA said Feb. 25. 

Boeing also will pay $1.2 million to settle two separate but related enforcement cases that involved putting undue pressure on employees, the agency added. 

The FAA faulted the manufacturer for missing some “improvement targets” linked to the agreement, “and because some company managers did not sufficiently prioritize compliance with FAA regulations,” the agency said in a statement.

Boeing’s biggest deficiency came in meeting the agreement’s “regulatory compliance plan” obligations, the FAA said in a letter to Boeing detailing its findings. “Boeing’s shortfalls ... were numerous, varied, and called into question ... performance under several other sections of the agreement,” the letter said.

The FAA also found Boeing failed to get certain certification and other regulatory-process submissions in on time, while some submissions were deficient. Boeing’s “accuracy of stamping and other submissions” was not satisfactory, nor were its “Organization Designation Authorization (ODA) and internal auditing system for regulatory compliance” practices, the agency added. 

“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 in a statement. “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.”

The 2015 agreement stemmed from two issues FAA investigated—Boeing’s use of non-compliant fasteners and not meeting deadlines on providing instructions for installing fuel tank inerting systems. The agreement called for Boeing to pay $12 million in fines and make a series of process improvements in 12 general areas or face additional penalties. 

The FAA’s decision comes seven weeks after expiration of the five-year agreement’s period, and one day after release of a U.S. Transportation Department (DOT) Office of Inspector General (OIG) report that revealed the FAA had concerns with Boeing’s compliance status well into 2020.  

Boeing also will pay $1.2 million to settle two separate cases involving its ODA program. which allows specific company personnel to perform certain functions on behalf of the FAA. Both cases involved work being done at Boeing’s North Charleston, South Carolina facility that will soon be its lone 787 final assembly site. 

In one case, Boeing “failed to follow quality control processes and subjected ODA members to undue pressure or interfered with an airworthiness inspection of a Boeing 787-9,” the FAA said. 

In another, Boeing had ODA personnel reporting to managers “who were not in approved ODA management positions,” the FAA said. Several cases of undue pressure on the ODA employees were reported.  

Despite the pressure, the ODA employees did not create any safety hazards by bowing to management, the FAA said. 

“The ODA unit members fulfilled their FAA responsibilities to ensure aircraft were conforming and in a condition for safe operation prior to issuance of their airworthiness certificates,” the agency said. 

The ODA-related enforcement actions were announced in August 2020. The FAA said the $1.2 million in penalties for them were being assessed in lieu of a higher amount linked to the 2015 settlement agreement. That agreement included ODA-related requirements that were not met, as the two enforcement actions make clear, the agency said, 

“Boeing believes that the announcement today fairly resolves previously-announced civil penalty actions while accounting for ongoing safety, quality and compliance process improvements,” the company said in a statement. “We look forward to ongoing engagement with, and direction from, the FAA as we continuously improve safety and quality in our processes.”

The manufacturer is dealing with a series of quality and non-conformance problems on the 787 program within its facilities and supply chain. The issues led to post-production inspections and re-work that have kept Boeing from delivering any 787s for more than four months. 

Boeing also had several problems with the 737 MAX unrelated to the recent, 21-month grounding, including installing unairworthy slat tracks despite knowing that the parts being supplied did not meet its specifications.