Developing New Drone Programs or everything there is to know In 2-Hours By: Harrison Wolf President, Wolf UAS LLC USC Aviation Safety & Security Program Instructor

Topics to Consider when Building a Program  Challenges for Operators and Organizations  In-House versus Outsource Pros and Cons  Vendor Selection Procedures  Certifications / Standards Requirements  Insurance & Risk Management Strategies  Building Flight Operations  Plans & Procedures  Financials & RoI  Business Cases and How to Build Them

Where are we and where are we going?

Top Applications for the Energy Industry • Gas System Monitoring • Anomaly detection • Foliage growth analysis (over time) • Accident Investigation • Insurance Support (Photography) • Terrain Mapping • Facility Security • Generation Station Mapping • Wind Generation System Inspections • Wind Generation Collision Detection • Weather Damage Support • Mission Critical PoIs VLOS Tower Inspections & Training Line Monitoring or LiDAR Inspection BVLOS Transmission, Distribution, Generation System Monitoring

Challenges Facing Companies It can be hard to differentiate between operators. Proving value internally can be difficult. • What defines your your value proposition? Common Weaknesses in Operations: • Data Protection and Liability • Work Flow Management • Lack of Managerial Experience • Lack of Aviation Knowledge • Lack of clarity in the regulatory environment • Lack of Organizational Clarity • The “Organizational Buy-In Problem” Public perception in your area or industry can cause problems. • How do you protect your reputation?

Challenges Facing Operators Weak points in flight operations: • Data Transfer and Analysis • Lack of Experience • Lack of Knowledge • Lack of Formal Training • Lack of software support • The “Turn Key Solution” Conundrum • The “Need to Overpromise”

Building a Program: Outsourcing or Insourcing • Insourcing is a business practice performed within an organization's operational infrastructure. • Outsourcing enlists the help of outside organizations not affiliated with the company to complete specific tasks. As a result, these differences effect cost, location and resource aspects of the organization, which influences decision making. The organization's control over operations and decision making differs while using outsourcing and insourcing. Organizations that use outsourcing for a particular service or manufacturing process have minimal managerial control over the methods of an outside organization.

Benefits Associated with Program Development Insourcing • Organizational Benefits • Greater Oversight • Strategy & Tactics • Institutional Knowledge • Safety Program Investment • System Benefits • Owned Systems to fit needs • Software integrated to current tech • Controlled Lifecycle management • Self-insured or managed documentation • Better Protected Reputation Outsourcing • Relationship Benefits • Cheaper in Short Term • Less development time • Leverage experience from others • Less Training for pilots and VOs • System • No investment needed in hardware • Require conditions met via contracting • Data can be analyzed and delivered externally

Costs Associated with Program Development Insourcing • Organizational Costs • Training • Salary • Union Relationships • Executive Buy-in • Capital • Systems (Hardware) • Processing (Software) • Lifecycle management • Insurance • PPE Outsourcing • Relationship Costs • On-site familiarization • Scheduling • Flexibility • Oversight • Reputation • System • Limited Control or Choice • Software Integration • In-House application of Data • Data protection?

Vendor Selection: How to Pick the Right Team for Your Job? • Regional Expertise • Can benefit your operation due to environmental considerations such as fire concerns, wildlife management issues, etc. • Offset this by knowing what requirements you have in your AOO prior to engagement • Domain Expertise • Greatest benefit because they may be more familiar with conditions in your AOO such as EMI, working conditions, OSHA requirements, best practice standards • Don’t assume they know problems associated with your AOO

Interviewing Vendors • What to ask for of new vendors? • Compliance documentation • Safety Manuals (SMS), Flight Ops Manuals, Emergency Response Plans, Training Manuals • Always ask about non-standard flight operations: Example: We might need a night flight conducted to check out Infrared on transformers in the area, can you do this? • Discern how well they known their equipment, is it available to inspect? • What type of software do they use and do they provide processing, hardcopy, or both?

Where are we and where are we going? (Airworthiness)

What Business Are You In? Hint: Not just the Drone Business •Land Management •Maritime Support •Infrastructure Repair •Disaster Response •Forestry •Flare Stack Inspections •Migration Tracking •Real Estate Photography •Wind Generation Inspections •Wild Life Preservation •Promotion and Engagement •Incident Accident Investigation •Construction •Mapping •Aerial Volumetrics •Security and Perimeter Control •Point Cloud Mapping

What Business Are You In? Hint: Not the Just Utilities Business • Airspace Concerns • Operational Approvals • Crew Resource Management • Fatigue Risk • Aircraft Maintenance • Aircraft Purchasing and Design • Radio Communications • Visual Line of Sight • Operational Risk Associated with flights • Personnel “Recommendations” • Environmental Control • Contractor Hiring and Decisions • Software integration • ”The Data Burden” • Emergency Response Coordination

So You Want to Use Drones… Now What? • CONOPS – Understand your Operation • SMS – Safety as the Differentiator • VFD - Value Focused Deliveries • Triple D – Data, Documentation, Delivery

The Concept of Operations? The First Step in Full Understanding of Your Mission Weather GPS location and connectivity Infrastructure imprint Population density Regulations & Airspace Environment System Specifications? Needs or Wants? Performance Characteristics? Autonomus v Manual flight? System YA repeatable, cycliclal, auditable, formal approach to mission understanding. Result Flight record? Past performance? Training requirements? Personnel What success requirements do you have? What unique elements exist? Mission You are now able to accurately assess the operation from a formal approach to safety Output

The CONOPS CONOPS Product Start Operational Risk Assessment Risk Acceptable? Revise CONOPS or Product Redesign No Document YES System Design and Purchasing Decisions Mission Design Workflow Approach & Change Management

Electrical Distribution Inspections Mission Data Delivery to internal analysis team Tower inspections Medium Distance flights from central point System DJI 210 IR and image analysis EMI interference protections Personnel RPIC, VO, SO Full training Course, 15 on the job flights documented Data analysis internally Environment Publically accessible towers, rural pop. Some airspace issues, varies VMC, winds gusts occur, High fire hazards

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Planning and Program Development (Strategy) Incident/Accident Response • Timeline based approach checklist for emergency situations • Emergency contact information • Localized air traffic management contacts • Roles & Responsibilities during emergencies Standard Flight Operations • Outlined Approved Maneuvers • Manual vs Autonomous • 2D vs 3D • Verbal Communications • Safety Roles & Responsibilities • System Specifications & Limitations Training • Mission Type Requirements • Environment Requirements • System Requirements • Communications Guidelines and Recommendations • Roles and Responsibilities for training management • Verification

Safety Procedures & Documentation (Tactics) Pre-Flight Inspection • Prior to the first flight… • Of the new location? • Of the day? • Of the Week? • Maintenance records • Area reports or hazards Pre-flight Checklist • Hardware & Software • Payload & Firmware • Payload • Approvals • Personnel • Environment Pre-Flight Brief • Plan for the mission • Identify Hazards • Assess Hazards for Risk • Severity & Likelihood = Risk • Mitigate Identified Risk • Document Post-Flight De-Brief • What happened? • Any incidents to report? • How did the system perform? • Any unidentified hazards to report? • Document flight and upload data

Oversight (Assurance -> Promotion) • Safety Action Group • Executive Buy-in & Engagement • Program Meetings discussing performance • Operations Reviews • Industry Trends and Reviews • Incident and Accident Report Presentations • Logging Flights in a Drone Log Book program • Dronelogbook • NVDrones • Kittyhawk.io • Skyward

The Challenge of Evaluation… Safety as a Differentiator rentiator • Costs are coming down industry wide as more entrants enter the field and regulatory hurdles are minimized • 14 CFR 107 provides a pathway for legal use without a Part 61 pilot license • Systems are becoming homogenous • Manufactured sUAS are becoming a commodity and specializing into vertical segments • Reputation costs matter for large companies in major industries.

What is SMS? Formal safety approach that provides industry leading safety theory! •ICAO Annex 19 – Safety Management Systems •ICAO Doc 9859 •ASTM Best Practice Standard F1378-16 •FAA SMS Framework •Drones: Safety Risk Management for the Next Evolution of Flight

What is SMS? Adopting Industry Best Practice Opens Access! •Higher Risk Environment Operations •Minimizes liability concerns and promotes good behavior •Enables Efficiency and Efficacy in operations •Sets an operation apart as and industry leader in safety.

For Large Companies and Small Operators! Safety Policy Leadership and Culture Safety Risk Management Assessment and Analysis Safety Assurance Data, Flight Logs, Trend Analysis Safety Promotion Documentation, Training, Awareness

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Energy Industry Complexities Drive Safety Needs Training for CRM, capability, and documentation Urban and Suburban flight requirements Infrared, Multispectral, LiDar, Mapping are Required High reliability systems Reputation is vital Storm response and Emergency response One Pilot and One VO, often a third

Assumptions for Financials Item Cost Quantity Total Year to Year Change? Evaluation Method that Drives Costs System Purchase $16,000 3 $48,000 Yes Demand on Flights, Maintenance Issues, New Models, Upgrades, etc. Flights Per Year (per hour cost listed) $100 10 X 12 = 1200 $12,000 Yes Requests vs. Approvals, Value internally Maintenance Costs $1,000 12 $12,000 No Replacements, etc. Training $3,000 2 $6,000 Yes Internal knowledge dissemination Program Development (SOPS, Documentation) $25,000 1 $25,000 Yes Documentation upkeep in-house, Audits, etc. Software Purchase and Integration $5,000 4 $20,000 Yes Log booking, system requests and integration, risk mitigation tracking, data analysis and integration Year 1 Costs $123,000 Likely to go down More flights, less investment in hardware and software

Returns on Investment • What task is this replacing? • Track every mission or propose every mission you can think of that a sUAS asset and training person can be used for. • Example: LIDAR imaging using fixed-wing drone for vegetation management quarterly may replace manned fixed-wing operations yearly. • Quantify the value of that: • Non Drone (Normal Hourly Rate X Normal Hours Spent) – Drone (Hourly Rate X Hours Spent) = Value Saved to the company • Identify the cost of damages to personnel, the public, or property for standard operations by adding internal costs associated to that on yearly basis • What tasks are now made possible? • Identify your industry uses for drones that could be done with the asset in addition to the core value, and outline timeframe for implementation. • Don’t assume your bosses, purchasing, or budget department knows about drones and how they can be applied. • Quantify the value overtime for these new tasks added to portfolio: • Example: Using drones to take multispectral images of infrastructure when not being utilized to examine cracks or degradation.

Where CONOPS and Mission Excel for Value - RoI System – GPS Denied environments, 360 LiDar Personnel – Specially trained for indoors Environment – Boilers, storage tanks, etc. Mission – Inspections Where does the RoI Come From? • Shutdowns of up to 2 days become 2 hours ($100,000) every 120 days • Scaffolding costs and personnel costs removed ($20,000) • Purchase of energy from other companies to satisfy customers removed (Various)

Certifications & Standards • Established Standards • American Fuel & Petrochemical Manufacturers • Offshore oil and gas UK • ASTM F38.02 • F2849-10 Standard Practice for Handling of Unmanned Aircraft Systems at Divert Airfields • F2909-14 Standard Practice for Maintenance and Continued Airworthiness of Small Unmanned Aircraft Systems (sUAS) • F3178-16 Standard Practice for Operational Risk Assessment of Small Unmanned Aircraft Systems (sUAS) • F3196-17 Standard Practice for Seeking Approval for Extended Visual Line of Sight (EVLOS) or Beyond Visual Line of Sight (BVLOS) Small Unmanned Aircraft System (sUAS) Operations • WK28019 New Practice for Selecting sUAS Launch and Recovery • WK37164 New Specification for Operations Over People • WK59317 Vertiport Design • ANSI announced interested in standards • JARUS

Certifications and Standards • What do we need? • Industry specific guidance for specific operations or unmanned aircraft systems • Application of known issues to unmanned aircraft. • Example: How close can an unmanned aircraft get to distribution lines? Do the same limitations that helicopters have, pertain to unmanned aircraft? • Example: How do you certify an unmanned aircraft for operations near nuclear generation? • Example: Agriculture and vector control industries have certifications and licensing for aircraft… do unmanned aircraft have to follow the same licensing? Are these licenses available? • AB527 is a good example of regulatory change required for the industry • Industry participation is necessary to promote specific knowledge to contracts and new entrants to the market place

Organizations Developing UAS Operations Develop SOPs that are easy to understand and integrate drones Develop evaluation criteria that can be understood by applicants Define and describe your mission needs very specifically Understand the limitations of UAS systems Integrate an SMS that protects your organization and enables safe UAS operations

SECTION TITLE | 2 Insurance Specific Concerns • How can Insurance Companies Benefit from Drones? • Accident Investigations • Emergency Response Claims • Real Estate Surveying and Analysis • Photogrammetry Analysis

SECTION TITLE | 2 Insurance Specific Concerns • What unanswered questions exist that may impact insurance companies? • Autonomous failure liability • Privacy Invasion Costs • Personal Injury due to information gathering • Worker’s Compensation • Mismanagement Underwriters should always ask about the following things: 1. Data Collection, Storage, Usage 2. Physical Specifications 3. The Purpose of the Drone Use 4. Organizational Procedures 5. Manuals & Training

SECTION TITLE | 2 Types of Coverage Currently Offered • Liability Coverage – Protection of personal injury which also covers invasion of privacy. Scope depends on aircraft mission and payload. If it is meant to gather data the coverage may need to be road to provide additional protection than a package delivery drone. • Property Coverage – Applies to the production, assembly and wholesaling process, which not only protects the parts and finished product in warehouse but also the machinery. • Whole Coverage – No industry consensus yet... Similar to large aircraft? • Workers’ Compensation Coverage - Protection from drone related injuries in and around facilities where they are being flown or flying • Directors and Officers Liability Insurance – Protection from organizational flaws, mismanagement, or poor SOPs

Providers • AIG – Coverdrone - https://www.coverdrone.com/ – protection in-flight, including full cover, along with liability insurance and a host of other features • ProSight – http://www.prosightspecialty.com/solutions/drones/ - drone insurance coverage designed as a on-estop solution for drone operators • Transport Risk Management - http://www.transportrisk.com/uavrcfilm.html – multitude of coverages • Unmanned Risk Management - http://unmannedrisk.com/ Market “Fixes” • http://www.amazon.com/dp/B002I05VPO/ref=pe_385040_30332200_TE_item – Square Trade Accident Protection plan – “Camera Accident Protection” • https://uavsystemsinternational.com/insurance/ • http://www.filminsurance.co.uk/drone-uav-insurance.html - UK Based – focused on film industry

Drone Insurance Provider Concerns & Requirements • Invasion of privacy: Perhaps the greatest concern from drone use, professional indemnity insurance can cover damages for breach of privacy from drones. • Negligent or reckless pilots: Insurers need to be concerned about moral hazard because pilots could feel disassociated from risks. Lead insurers should consider higher-risk retention requirements such as training and accreditation, and also that pilots prove to act responsibly. • Patchy regulations: A solid regulatory framework is critical to drone insurance providers. Currently, regulation is inconsistent between nations. • Cyber attack exposure: Cyber security measures should be a significant consideration for underwriters' risk assessment for commercial drone use. • Effective airspace control and collision-avoidance technology: These advances will become key requirements for drone operations in busy airspace, according to the report.

New Program Checklist (Summary) 1. What do you want your operation to Accomplish? 2. How many people will be involved in your new program? • Outsource or Inhouse? 3. Does what you’re trying to accomplish have regulatory, legal, or compliance hurdles to overcome? • Ex: Spraying from Drones AB527 4. What are the specifications for your operation? • System, Environment, Personnel, Mission 5. Are all of your procedures and plans in place to enable a successful operation? 6. How will you integrate the data into your current workflow to ensure you can use the information you acquire? 7. How will you protect your data?

Aviation Best Practices: Safety Management Systems Operational Risk Assessments Standard Operating Procedures Audits Report Writing Certifications & Training Hardware Best Practices: Software and Hardware differences Data storage & Use policy Maintenance Records & Cycles Sourcing and Monitoring

Thank You! Questions? Harrison Wolf Phone: 805 302 8480 USC Aviation Safety & Security Program http://viterbi.usc.edu/aviation/ http://www.wolfuas.com @wolf_uas