Aerospace Industry
The following guidelines are intended to provide examples of “experimental development” projects which would qualify for Canadian SR&ED (Scientific Research & Experimental Development) tax credits.
Content Summary:
1 -
Aerospace Industry Guidelines:
901
- Aerodynamic prediction methods for tiltwing aircraft:
902
- Elongation of Existing Aircraft Fuselage:
NOTE: THESE GUIDELINES ARE BASED ON THE CRA'S INFORMATION CIRCULAR "IC86-4R2SUP2 SCIENTIFIC RESEARCH AND EXPERIMENTAL DEVELOPMENT: AEROSPACE INDUSTRY APPLICATION PAPER"]
1 - Aerospace Industry Guidelines:
Scientific or Technological Objectives:
[NOTE: THESE GUIDELINES ARE BASED ON THE CRA'S INFORMATION CIRCULAR "IC86-4R2SUP2 SCIENTIFIC RESEARCH AND EXPERIMENTAL DEVELOPMENT: AEROSPACE INDUSTRY APPLICATION PAPER"]
We recognize that in many cases the project's initial technological objectives may be modified as development proceeds. This usually does not affect eligibility. When technical problems arise after the initial technological objectives have been achieved, it is appropriate to consider that a new project or set of sub-projects has begun, and the original one ended. We recognize that specific projects that meet the three essential eligibility criteria are allowable, but generally view "ongoing development" as closely allied to routine engineering or routine development (see paragraph 2.7 (i) of IC86-4) which are not eligible. The claimant should therefore distinguish between new sub-projects and data collection that support a project, which are eligible and routine development and routine data collection, which are excluded.
Technology or Knowledge Base Level:
Benchmarking methods & sources for citings:
There are three types of project designs:
1. Preliminary design: Where preliminary design is undertaken using existing knowledge within the experience of the company, and/or based upon generalized data such as that which is available in standard handbooks, the project design undertaking is considered routine engineering, since it arises from applying established knowledge. If the process terminates at the proposal stage, the work performed will be judged ineligible, as at this point technological uncertainties have not been resolved, although they may have been identified.
An exception to the above is the preliminary and/or advanced design of new products for the commercial market where substantial analysis of new concepts, new materials, experimental research results, etc., must be incorporated to define a probable product that will show significant improvement over those products already available in the marketplace.
On the other hand, if the project design phase goes into the prototype development phase, which by its nature requires resolving technological uncertainties, then the technical work becomes eligible as supporting activities closely linked to an eligible project. However, if in a given time period, a design office creates 10 preliminary designs (proposals), and develops only some of them, then only the expenditures for those supporting activities for eligible projects will be considered qualifying expenditures. We consider R&D by projects, not by department or function.
2. Project design: The project design, in itself, requires developing new methods of analysis and undertaking or generalizing model tests and their results to confirm the adequacy of the analytical methods. This undertaking constitutes an extension to scientific or technological knowledge and thus the project, in itself, will be eligible.
3. Project design in response to a Request for Proposal (RFP): Requests for Proposals for aerospace systems or devices are extremely detailed, a response to which will in general require that certain performance parameters, extending the existing state of the art, be guaranteed. In many cases, particularly those relating to military aerospace products or devices, a limited number of manufacturers may be requested to respond. Usually, only one of the respondents will be contacted to continue the project into a prototype development phase. As advances in technology are required along with guarantees of performance, there will always be a need for experimental work or extensive analysis to meet these requirements. Under such circumstances, the technical preparation of the response to the RFP, even when it does not lead to a development contract, should be considered for eligibility.
Typical examples of eligible responses to RFPs are complete aerospace vehicles (aircraft, satellites or other space vehicles), power-plants, environmental control systems, for military or civil aircraft, and fuel control systems for advanced engines where experimental work, simulation studies, or full-scale mock-ups have constituted elements in the work supporting the preparation of the response.
Field of Science/Technology:
Aerospace engineering (2.03.04)
Intended Results:
· Develop new processes
· Develop new materials, devices, or products
· Improve existing processes
· Improve existing materials, devices, or products
Scientific or Technological Advancement:
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Uncertainty #1: Inherent Technological Uncertainties |
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In the aerospace industry the stringent requirements of the regulations and critical nature of safety, design, engineering, weight, physical volume/size, and performance often give rise to technological problems that result in the creation of eligible projects in areas which might be routine in other industries. The most significant underlying key variables are: safety, weight, volume/size, performance (unresolved) |
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Activity #1-1: Weight minimization |
Work performed in Fiscal Year 2009:
Methods of experimentation:
The primary problem of weight minimization necessitates structural development through detailed and sophisticated analysis. This is supported and verified by developing and testing the structural elements, and eventually the complete structures.
Results:
[NOTE: IF THERE WERE ANY TEST RESULTS FROM THIS ACTIVITY THAN THESE SHOULD BE STATED HERE]
Conclusion:
This approach is the only feasible way of achieving the technical objective of the use of minimum weight structures that (a) comply with the standards imposed by regulation, and (b) provide adequate economic life in terms of hours or cycles of operation.
Key variables resolved: volume/size, weight
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Activity #1-2: The need for model and full-scale testing |
Work performed in Fiscal Year 2009:
Methods of experimentation:
Analysis alone cannot determine those aerodynamic characteristics of aircraft that influence not only performance, but also flight safety behaviour. This deficiency arises from the incomplete status of aerodynamic theory, and as a result, extensive testing is required.
Results:
[NOTE: SIMILARLY, IF THERE WERE ANY TEST RESULTS FROM THIS ACTIVITY THAN THESE SHOULD BE STATED HERE]
Conclusion:
Model testing in wind tunnels is therefore required to identify and resolve the technological uncertainties inherent in aerodynamic interactions. This alone, however, cannot resolve all such technological uncertainties since the representation afforded by scale model tests is limited by physical laws. For true representation, the aerodynamic scale, as measured by Reynolds Number (which determines, for example, the profile drag, and controls hinge moments), and the effects of compressibility of air at high speeds, as measured by Mach Number (which, for example, determines the lift slope of wings and tail surfaces, variation of pitching moment with angle of attack, controls hinge moments and wave drag) must both be satisfied. These cannot be done simultaneously at model scale, and in the end, full-scale flight testing and development is required to identify and resolve all of the technological uncertainties involved in the aerodynamic interactions.
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Activity #1-3: Developing methods and techniques |
Work performed in Fiscal Year 2009:
Methods of experimentation:
There is continuous technological advancement in the aerospace industry, and thus the industry has an ongoing need to develop new methods of analysis, experimental techniques, materials and manufacturing techniques. Such undertakings contribute to the advancement of science and technologies, and will generally fall within the conditions for eligibility.
Conclusion:
Typical examples of such activities include developing methods to analyze and design aerofoil profiles in the viscous flow regime, and supporting tests to verify these methods; advances in analyzing structures for strength and integrity; developing manufacturing methods for new materials; and developing methods to apply these materials in aerospace structures.
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Activity #1-4: Systems and powerplants |
Work performed in Fiscal Year 2009:
Methods of experimentation:
Considerations similar to those for aircraft apply to systems and power-plants. However, if a power-plant is installed in an aircraft (e.g., company commuter aircraft) which is used for non-scientific purposes simultaneously with in-flight development, a different situation exists. Only those incremental activities associated with installing the monitoring and data-recording systems, and the time technical observers spend monitoring the engine in flight, should be considered eligible activities. The same considerations apply to developing systems in flight.
Conclusion:
The interactions between structural distortions and the aerodynamic forces and moments resulting from these interactions can be fully determined only at the flight test and development phases. These interactions may affect not only the structural integrity of an aerospace device, but also its flight characteristics. There is, consequently, often system uncertainty in the development of an aerospace device, as well as technological uncertainties at the more detailed levels. The spectrum of eligibility is strongly influenced by these factors.
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Activity #1-5: Mock-ups |
Work performed in Fiscal Year 2010:
Methods of experimentation:
The construction and use of full scale models (mock-ups) of aerospace devices is often an essential component of the development program. They are generally eligible if they are built in support of design and development in an eligible project.
Conclusion:
Another example is when an engine manufacturer provides a full scale model, or an actual engine, to an airframe constructor so that it can be incorporated in an eligible technical mock-up. Sometimes, models that are built for eligible technical development purposes are also used for other purposes such as sales promotion and marketing, which are not eligible. We will examine the facts of each case in accordance with audit guidelines when determining the eligibility of mock-ups and models.
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Activity #1-6: Human/machine interaction |
Work performed in Fiscal Year 2010:
Methods of experimentation:
In many aerospace projects, the interaction between a human operator and the device that he or she is controlling poses a complex technological problem. Major contributing factors are the physiological, neurological, and other limitations of the human operator, considered as an element within a servo system. The effect of these limitations implies that changes to the purely physical elements comprised in the system may be necessary, and that these changes can be best undertaken by simulation or flight testing with the human operator in the servo loop. System adjustments or modifications are made until a point is reached where the human operator can carry out a prescribed task without excessive physical or neurological effort. Certain aspects of psychological research may also be involved in this kind of development, and when this research is done in support of eligible SR&ED, it would be allowed as specified in Regulation 2900.
Conclusion:
Examples of situations demanding this type of approach are when modifications are made to systems: for instance, to achieve acceptable relations between the frequency and damping of control-induced pitching motions so as to permit the operator to track a specified path; or to limit the degree of adverse yaw, and the ratio and phase relationships between roll and sideslip angles so that an approach and landing path may be followed with accuracy.
Key variables resolved: safety
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Activity #1-7: Activities following Type Certification |
Work performed in Fiscal Year 2010:
Methods of experimentation:
Following Type Certification, aerospace devices and systems in service may exhibit defects and/or deficiencies that could not reasonably have been identified and resolved at the initial development stage. When such defects or deficiencies directly influence the targeted technical performance or operational safety of the device, then those activities required to resolve the technical problem should be considered for eligibility. To illustrate, we can cite examples of significant problems arising partly or largely after Type Certification, when technological deficiencies are revealed through:
- fatigue tests, creep tests, and their implications;
- corrosion and stress studies;
- cold soak and other special environment tests;
- de-icing tests and modifications;
- lightning tests;
- propeller balance tests;
- autopilot refinements;
- wear tests;
- non-critical but significant flight tests;
- heat loss, insulation, and oil cooling changes;
- engine fuel control operation; and
- engine component operation.
Generally speaking, only those matters involving technological problems which bear directly upon the continuance of Type Certification should be considered for eligibility. Such regulated requirements such as the installation of smoke detectors and fire extinguishers in toilet compartments are indeed related to the maintenance of Certificates of Airworthiness, but as they do not resolve any technological uncertainties, they are not considered eligible.
When an aeronautical product is modified to the extent that re-certification is required, for instance when the fuselage of an existing model is stretched to increase its capacity, a new model Type Certificate may be granted. Alternatively, a Supplemental Type Certificate may be issued at the discretion of the regulatory agency. In either case, only the work involved in modifying and qualifying the prototype model of the modified device or system can be considered eligible.
Typical examples of modifications likely to require Supplementary Type Certification are:
The installation of a new type of engine into an existing airframe, e.g., the substitution of a reciprocating internal combustion engine by a gas turbine engine, and the associated system changes engendered by such a substitution.
Structural alterations that could influence the structural integrity of an existing aircraft e.g., structural alterations to a pressure cabin to provide an optically flat window for a survey camera.
Configurational alterations that could alter the flying characteristics of an existing aircraft, e.g., the external mounting of magnetic anomaly detector arrays for geo-magnetic survey purposes; or the mounting of floats in place of the landing gear on an aircraft not previously certificated for operation on floats.
Similarly, in spaceflight development projects, eligible activity may continue to be found beyond the Critical Design Review stage if, despite all available techniques and reasonable measures such as extensive ground testing, sufficient uncertainties exist about whether the:
- flight equipment meets all the specification requirements as an integrated unit (initial integration);
- flight equipment meets all the specification requirements when integrated at the spaceflight vehicle level; and
- flight equipment, after launch, meets all the specification requirements while in orbit or on a mission, over the required operational life of the equipment.
Conclusion:
Consequently, depending on the circumstances of the individual case, eligible post-CDR activities and associated expenditures may be identified in relation to (a) the integration and testing of flight equipment, including the analysis of test results, and (b) the development of test methods and protocols for, and the actual testing of, the equipment while it is in orbit or on a mission before the spaceflight vehicle can be released for operational use.
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Activity #1-8: Vendors |
Work performed in Fiscal Year 2010:
Methods of experimentation:
In some cases, there may be agreements to enter into joint R&D with a vendor, or there may be a significant element of uncertainty or advance. For example, experimental flight tests may have been undertaken to pinpoint the need for a vendor-instituted `fix,' or to verify the safe incorporation of a change. However, if a firm is not really involved beyond the routine stage with a vendor who has developed a product past the initial configuration, then the work is not eligible.
Conclusion:
[A DISCUSSION ON WHAT WAS LEARNED SHOULD BE INCLUDED FOR EACH ACTIVITY]
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Activity #1-9: Change Control Board activity |
Work performed in Fiscal Year 2010:
Methods of experimentation:
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Engineering changes do not automatically qualify just because they are done in an aerospace environment. Substituting a different material, or substituting one off-the-shelf item for another, or adding a spacer or a shim are considered to be routine (unless a technical case can be presented otherwise) and are not eligible activities. To be eligible, the engineering activity must be done in support of an eligible SR&ED project.
Conclusion:
Rectifying failures can in many cases lead to eligible projects. However, correcting mistakes and oversights, such as errors in reading drawings, is a standard activity of Change Control Boards, and would not be eligible. There may be cases where an error is not obvious, such as when it is a result of the incomplete status of available knowledge. In such cases, a technical investigation and eligible project could arise. Each situation will be examined on its own merits.
