11 Dec 2019
A final invoice review may not be the thing that first springs to mind when you think of an engine shop visit, but it is nevertheless an important part of it and one that should not be missed.
We consider the final invoice review to be a key component of any shop visit. In fact, it's a key service that we offer to our customers during an engine shop visit.
As a first step, our highly-skilled powerplant engineers take the time to fully review and understand our customers' existing engine repair contract with their chosen MRO partner.
Next, the engineer will be able to identify if there are any discrepancies and have the evidence of these checked against shop visit report records and applicable contract clauses. If they are identified, we will provide a list of all open items and dispute them on the airline's behalf. The preferred outcome of this process is that the airline receives a credit from the MRO or OEM.
After the engineer has taken these steps, they will review what material was scrapped during the engine shop visit and determine if that material should be covered by the MRO as part of the contracted scrap coverage rate.
They will also assess if replacement material is required in accordance with a modification or airworthiness directive (retrofit or improvement package). If covered, our engineers will assist the customer in raising the discrepancy with the MRO or OEM.
The reason for an airline receiving a credit can vary. The most common cause is being overcharged for 'over and above' work by a service provider for items outlined in the contract. Another reason is when material that could have been repaired is scrapped. Handling fees can also be overcharged by the service provider. This occurs when the service provider does not comply with a ceiling assigned per line item as per the contract.
The final invoice review service usually takes between two and three days. We offer this service because we are confident that we can save our customers money on the cost of their engine shop visit events and our results speak for themselves. Over the years we have managed to save money for many of our airline partners.
For example, during managed shop visits for a customer with CFM56-7B engines, the service provider was unable to utilise used material as per agreed contract, and consequently installed new parts without prior approval and charged additional costs as an over and above.
We challenged these extra costs on behalf of our customer, resulting in savings of over US $1 million across the shop visits.
The invoice review service isn't the only area of shop visit support we offer. We also support airlines with MRO selection so that they can ensure they are getting the best market rates.
We offer contract negotiation, work scope designation, shop control to ensure the service received is the service that is contracted, and advanced PO so that material purchases can be planned in advance and savings maximised.
All of these services are part of our goal to transform efficiency for our customers and the industry as a whole. Find out more about how we can help you.
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