FAA and Other Agencies Should Consider How a Safety Management System Might Affect Small Business

Advocacy just filed public comments on the Federal Aviation Administration’s (FAA) pre-rulemaking notice on Safety Management System (SMS).  This is a really interesting issue because FAA and several other federal agencies are exploring whether they should require businesses to adopt SMS as a regulatory requirement.  In fact, there are various international agreements that may compel them to do so.

Under the SMS concept, a business essentially organizes itself around safety.  That is, safety becomes the essential organizing principle for every aspect of the organization— just as production or finance might now be.  The goal is to continually assess and mitigate risk as part of the corporate culture.  However, small businesses are raising some fair questions about the implications of SMS in the real world.  First and foremost is whether SMS is intended to be an additional layer of regulation or a transition to an entirely new way of regulating—one in which each business must define and meet its own safety parameter.  The government then assesses the firm’s compliance with its SMS program.  There has been a big debate within the Canadian aviation sector on this very issue.

Small businesses that attended Advocacy’s recent aviation roundtable expressed concerns about the open-ended and subjective nature of the SMS concept.  They want FAA and other agencies to identify and mitigate specific hazards, not hypothetical risks, and are concerned that an inspector could cite a business for not adequately addressing a “potential” or “perceived” risk.  They want to know when they are in compliance, and worry that SMS would establish a standard that (by definition) could never be met.

Advocacy is aware that SMS represents the latest thinking in safety and that many businesses and safety professionals support the concept.  However, because it could be especially costly and burdensome for small businesses, Advocacy wants to be sure that the implications are fully thought out.  For example, are there other approaches that would be more objective and flexible (such as scaling the program to the size, scope, and complexity of the operation)?

In addition to our letter, there is also an explanatory fact sheet on our website. If you would like to discuss this issue or have thoughts or comments, please feel free to contact me by email or phone, (202) 205-6144.

—Bruce Lundegren, bruce.lundegren@sba.gov
Assistant Chief Counsel

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