STATEMENT OF DENIS GALVIN, DEPUTY DIRECTOR, NATIONAL PARK SERVICE, DEPARTMENT OF THE INTERIOR, BEFORE THE SENATE COMMITTEE ON ENERGY AND NATURAL RESOURCES, SUBCOMMITTEE ON NATIONAL PARKS, HISTORIC PRESERVATION, AND RECREATION, REGARDING FINAL CONCESSION REGULATIONS.

JUNE 8, 2000


 Thank you for the opportunity to discuss the progress the National Park Service (NPS) has made in implementing Title IV of the National Parks Omnibus Management Act of 1998, P.L. 105-391.

Title IV of P.L. 105-391 became law on November 13, 1998. This title repealed the Concessions Policy Act, Public Law 89-249, and established a new concessions contracting process. The law is the product of over 20 years of work by legislators, departmental officials, and interested citizens who desired to change the concessions contracting process.

One primary goal of the new law is to make more efficient and business-like the NPS administration of concession contracts. We are being assisted in implementing the new law in this respect by the National Park Service Concessions Management Advisory Board established by Section 406(c) of Title IV. In this regard we are currently working with the Department of Defense to develop program competencies and a certification program for concession contracting personnel, based upon the Federal Acquisition Regulations (FAR) model, and we are also evaluating opportunities for performance–based contracting. At the request of the advisory board we are also doing more to make the most of our available staff and funding by increasing our outsourcing with the private sector, particularly in the financial and appraisal arenas. In addition, as noted in the President's 2001 Budget, we also intend to establish a new Senior Executive Service position in the National Park Service for an Associate Director for Partnerships and Business Practices, which will enforce our commitment to improving the concessions program. In its FY 2001 Interior Appropriations report language, the House Appropriations Committee noted that it "supports the Service's proposal to improve the management of partnerships and business practices by adjusting its organizational structure and redirecting existing resources."

The other primary goal of Title IV is to make concessions contracts more accessible to the general business community by eliminating barriers to competition. It does this by eliminating the right of preference in contract renewal for large operations, and by establishing controls on the amount of compensable interest that concessioners may acquire in the facilities in which they operate. Following the new law’s enactment, NPS immediately established a task force to develop regulations for its implementation. Proposed new concessions contracting regulations were published for public comment in the Federal Register on June 30, 1999. The original date for submission of comments was August 30, 1999. This date was extended to October 15, 1999, in response to public and congressional requests.

NPS, having considered all public comments received, published final regulations in the Federal Register on April 17, 2000. A final standard concession contract was published in the Federal Register on May 4, 2000.

We can now begin contracting under the new regulations. There is an urgent need to process concessions contracts. As of today, some 280 of the 630 NPS concession contracts and permits are operating under short-term contract extensions. NPS had to halt concession contracting actions as a result of the new law until publication of the final regulations. It is imperative that NPS recommence contracting actions in order to reduce this backlog. Concession operations conducted under short-term extended contracts are not good for park visitors, the concessioner, or NPS. Particularly, concessioners have little or no incentive to make needed capital investments in visitor facilities in park areas when they are operating under short-term extensions of their contracts. There is additional concern that older concession contracts do not reflect franchise fees to the government commensurate with the privilege granted by the contract.

We gave very serious consideration to the public comments received on the proposed regulations. Although only 124 separate comments were submitted (as opposed to over 1,000 received in response to our revision of concession contracting regulations in 1992), a number of the comments made excellent suggestions as to how the proposed regulations could be improved for the benefit of concessioners and park visitors.

Changes to the proposed regulations that were made in response to public comments include the following:

* The simplification of the concessions contracting process;

* The adoption of a numerical evaluation method for proposals;

* The elimination of a tiebreaker system for contract awards based on the amount of franchise fee offered in a contract proposal;

* A reduction in the information requirements and scope of approval for sales and transfer of concession contracts;

* Alternative formulations for determining the costs and value of leasehold surrender interests; and

* The elimination of unnecessary restrictions on outfitter and guide concessioners.

However, we were not able to accommodate the concerns expressed by some concessioners regarding the repeal of the preference in renewal given to existing satisfactory concessioners under the old Concessions Policy Act. Many existing concessioners felt strongly that they should be entitled to a preference in renewal of their existing contracts in accordance with the old law.

NPS considered these views. However, in consultation with the Department of the Interior's Office of the Solicitor and the United States Department of Justice, it was determined that, as a matter of law, the new law repealed the old law with respect to preference in renewal for existing concession contracts.

In summary, NPS believes that the final concession regulations will carry out the intentions of the Congress in the reform of our concessions program, and will be effective and fair to both existing concessioners and to new businesses that would like the opportunity to become NPS concessioners. Most importantly, we believe that the new regulations will assure that quality services will be provided to visitors at reasonable rates in units of the National Park System and that the operation of these services will be conducted in a manner that is fully respectful of our primary mission, the preservation of the resources of our national parks.

This concludes my testimony. I would be happy to answer any of your questions.