(Adds Boeing response, background on other fines)
By David Shepardson
WASHINGTON, March 6 (Reuters) - The Federal Aviation Administration on Friday proposed fining Boeing Co $19.7 million for allegedly installing equipment on hundreds of 737 aircraft containing sensors in heads-up displays that regulators had not approved for use.
The FAA alleges that between June 2015 and April 2019, Boeing installed Rockwell Collins Head-up Guidance Systems on 791 jetliners, including 618 Boeing 737 NGs and 173 Boeing 737 MAX aircraft.
The FAA said these aircraft were equipped with sensors that had not been tested or approved as compatible with those guidance systems. Boeing, which did not immediately comment, has 30 days to respond.
The MAX has been grounded since March 2019 after two fatal crashes but there is no relationship between the crashes and this issue. Collins declined to comment.
Boeing said Friday it had cooperated with the investigation and “done a thorough internal review and implemented changes to address their concerns.” Boeing said the issue was not safety but “insufficient documentation.” Boeing added that a review “found the parts met or exceeded all original requirements.”
Boeing added it is “committed to doing better.”
The FAA said Boeing violated regulations when it certified these aircraft as airworthy when they were not in conformance with their type certificates. The FAA also said Boeing failed to follow its own business process instructions, which are in place to help prevent such situations.
Rockwell Collins subsequently conducted the necessary testing and risk analysis and updated the documents, FAA said.
The FAA has proposed other recent fines against Boeing.
In January, the FAA proposed fining Boeing $5.4 million, alleging it failed to prevent the installation of defective parts on 737 MAX airplanes.
The FAA alleged Boeing “failed to adequately oversee its suppliers to ensure they complied with the company’s quality assurance system, ... Boeing knowingly submitted aircraft for final FAA airworthiness certification after determining that the parts could not be used due to a failed strength test.”
The FAA proposed a $3.9 million civil penalty against Boeing for the same issue in December involving 133 737 NG airplanes, the prior generation of the 737. (Reporting by David Shepardson; additional reporting by Tracy Rucinski in Chicago Editing by Chris Reese and David Gregorio)