DOT Launches Aviation Manufacturing Jobs Protection Program

This week, the Department of Transportation (“DOT”) announced that the Aviation Manufacturing Jobs Protection (“AMJP”) program, which was created under the American Rescue Plan Act of 2021, began accepting applications on Tuesday, June 15. A previous client alert providing background information about the program objectives and parameters can be found here.

The application process is not first-come first-served, so applicants who apply early do not gain an advantage over applicants who apply closer to the deadline. DOT guidance is available here, and a sample application form can be found here.

Interested applicants should take steps now to ensure that they have obtained DUNS/Unique Entity Identifier and that they have compiled their payroll and compensation data as of April 1, 2020 and as of March 31, 2021, as well as personnel and financial data for 2019, 2020, and 2021 prior to beginning the application process. Other key dates include the following:

• June 22, 2021 at 5 p.m. EDT: Questions about the application process are due and should be submitted to amjp@dot.gov.
• July 13, 2021 at 5 p.m. EDT: Applications are due. All applications should be submitted using the online system available here.

Application Process

Applicants should begin the application process by completing the pre-screening tool available at the online system link immediately above, which will provide a link to GrantSolutions, the system DOT is using to collect applications. After the portal closes on July 13th, DOT will review and validate the applications, verify eligibility, and establish the public contribution level for each applicant. Applicants will then be notified and will be provided a Financial Assistance Agreement outlining the terms and conditions of the assistance. Once an applicant executes a financial assistance agreement with DOT, DOT will make an initial disbursement of funds. Recipients will need to submit additional information and supporting documentation for subsequent disbursements.

Program Eligibility

It is not sufficient simply to be in the aviation manufacturing business. To be eligible for assistance, a business must meet at least one (1) of the three criteria below:

• Be actively manufacturing aircraft, aircraft engines, propellers, or components, parts, or systems of an aircraft or aircraft engine under an FAA production approval;
• Hold an FAA Part 145 Air Agency Certificate; or
• Operate a process certified under SAE AS9100 related to the design, development, or production of an aviation product or provision of an aviation product or service. Note that DOT will not make exceptions for businesses certified under other industry standards, such as ISO.

Other important criteria are as follows:

• The business must be established, created, or organized in the U.S. or under the laws of the U.S.;
• The business must have generated at least 50% of its 2019 operating revenue from aviation manufacturing activities and services, repair and overhaul activities and services based in the U.S.;
• Of the employees engaged in such activities as of April 1, 2020, at least 50% must have been based in the U.S.;
• The business has made involuntary furloughs or layoffs of at least 10% of its total workforce in 2020 as compared to 2019 or has experienced at least a 15% decline in 2020 total operating revenues as compared to 2019. Note that applicants will be required to provide either aggregate numbers of personnel as of December 31, 2019 and December 31, 2020 or data demonstrating the aggregate number of furlough days imposed between those dates or total operating revenues for the tax years ending in 2019 and 2020, as applicable.
• The business cannot have (i) received an employee retention credit under CARES for the calendar quarter ending immediately before entering into an agreement with DOT, (ii) received financial assistance under Phase 1 of the CARES Payroll Support Program, or (iii) be expending financial assistance under the Paycheck Protection Program as of the date the application is submitted.

Eligible Employee Group

The eligible employee group (“EEG”) is defined as follows:

• Includes only employees that were engaged in aviation manufacturing, activities, and services, or maintenance, repair and overhaul activities and services as of April 1, 2020.
  • “Engaged in” means that the employee spends at least 50% of his/her time actually conducting technical engineering design, design oversight, and/or the physical steps involved in create aircraft parts or components or conducting inspections, maintenance or repair work.
  • Note that this definition seems to exclude employees that exclusively provide support services (e.g. administrative, clerical) for aviation manufacturing activities;
• Cannot exceed 25% of the employer’s total U.S. workforce as it existed on April 1, 2020.
• Only includes employees with a total compensation level of $200,000 or less per year as of April 1, 2020.
  • Note that total compensation level means total base compensation and benefits, excluding overtime and premium pay and payroll taxes paid by the employer.

Each business will need to keep internal records of the specific employees included in the EEG, but those employees should not be individually identified to the government in the application.

Documentation Required for Application

A recent Federal Register Notice lays out a litany of documents and substantiating information required for the application, including:

• General applicant information (e.g., contact, business structure, authorized representative).
• The specific criteria that the applicant meets for eligibility (e.g., production approval holder, Part 145 certificate holder, or AS9100 certificate holder).
• Other identification information, including TIN/EIN, DUNS number/Unique Entity Identifier and SAM registration.
• Quantitative data demonstrating how the applicant’s operations meet the “significant operations in the U.S.” threshold, such as the number and percentage of employees based in the U.S. engaged in the qualifying activities as of April 1, 2020.
• Details showing how the applicant meets the furlough and layoff or decline in revenue thresholds, as applicable.
• Numerous certifications, including certifications that the applicant has not received/is not expending certain disqualifying forms of financial assistance, such as CARES Payroll Support Program funds, Paycheck Protection Program funds, or has not taken an employee retention tax credit in the immediately preceding quarter.
• The definition of the applicant’s EEG, including job categories and numbers of personnel in each category (excluding employee names and other information).
• The amount of financial assistance the applicant is requesting (which should be equal to half of the total compensation level as of April 1, 2020).