MARCH 22, 2001


Mr. Chairman, members of the subcommittee, thank you for the opportunity to discuss the progress of the National Park Service in implementing Title IV of the National Parks Omnibus Management Act of 1998, Public Law 105-391.

Title IV of Public Law 105-391 was enacted on November 13, 1998. This title repealed the Concessions Policy Act of 1965, Public Law 89-249, and established a new process for concessions contracting and the terms and conditions of those contracts. The law also established the Concessions Management Advisory Board and directed other changes in NPS’ management of its concessions program. The law is the bipartisan product of over 20 years of work by legislators, Departmental officials, and interested citizens who desired to improve the management of NPS’ concession program.

One of the primary goals of the new law is to make the NPS' administration of concession contracts more efficient and businesslike. 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.

The law directed the board to make recommendations to the Secretary of the Interior regarding the NPS contracting with the private sector to conduct appropriate elements of concession management; the review and approval of concessioner rates and charges to the public; the nature and scope of products which qualify as Indian, Alaska native, and Native Hawaiian handcrafts; and the allocation of concession fees. Related to the board’s mandate is the priority of the National Park Service to develop a business strategy for the concessions management program.

In the advisory board’s first annual report to Congress, recommendations focused on organizational realignments, research into non-appropriated funding instrumentalities, and specific programmatic issues such as the rate approval program. We are pleased to tell you that this season we will be implementing a competitive market approach to retail merchandise pricing. We will also implement the board's recommendation to establish a "business champion" within the National Park Service by recruiting a new Associate Director for Partnerships and Business Practices once the new NPS Director is in place. In addition, we are consulting with the private sector to find ways of streamlining our processes further, including our quality standards and evaluation program.

We have also contracted with PricewaterhouseCoopers, from whom you also will be hearing today, to conduct an internal analysis of the management of our program and existing business processes. PricewaterhouseCoopers has provided us with a number of recommendations which will assist us in fulfilling our commitment to addressing our fiduciary responsibility related to concession contracts, in the reengineering of existing management processes, and in further enhancing staff competencies and training. Furthermore, we are aggressively moving towards the use of private consultants to assist us in the management of our commercial visitor services.

We are also committed to ensuring that all NPS employees who are responsible for concessions management are properly trained and have the necessary knowledge and skills to perform their duties in a highly professional manner. In this regard, we are contracting with the Department of Defense and developing certification standards for all concession contracting personnel which would be comparable to the Federal Acquisitions Regulations (FAR) model. The certification standards parallel the three categories of concession contracts that are used by the NPS.

Category III contracts are used in situations where no land or buildings are assigned to the concessioner; consequently, the concessioner will not be allowed to construct or install any capital improvements and will not obtain any leasehold surrender interest. Approximately 330 outfitter and guide operations will be authorized by Category III contracts.

Category II contracts are used in situations where a concessioner will operate on assigned land or in an assigned concession facility, but will not be allowed to construct or install capital improvements. An example might be a gift shop operation located in a portion of a park's visitor center.

Category I is the highest level of certification and is generally for concession contracts that require a variety of services at several locations and include the assignment of lands and concession facilities, as well as leasehold surrender interest compensation and capital investment provisions.

All levels of certification require specific training, experience, and continuing education. This program of certification will be augmented with outsourcing of specific contracting functions.

We have also contracted with Northern Arizona University (NAU) to develop a hospitality certification program for all NPS employees with concessions management responsibilities and will again use the private sector as a benchmark to develop an action plan. NAU will deliver hospitality management training from their School of Hotel and Restaurant Management, providing a comprehensive, multi-year course of certification in hospitality management, including business and financial training.

Most importantly, recognizing that we must work smarter in a business sense, we also have outlined a strategy to implement the provisions of the new law that facilitate open competition for concession opportunities in the National Park Service. Through outsourcing, we will develop protocols that focus on the key business processes of contracting and contract oversight, greatly enhancing administration of high-priority and high-risk contracts. In doing so, however, we do not abdicate our responsibilities to resource protection and preservation, but rather we will ensure that the return to the government will be commensurate with the privilege granted by the contract and that the government's interests will be protected.

We are continuing our efforts to address the critical backlog of expired concession contracts, and anticipate the renewal and award of up to one hundred of them this coming year. We are, however, facing a significant "bubble" of work over the next several years, a workload that is beyond the capabilities of our current staffing situation. We anticipate the use of private-sector consultants to assist us in this process, particularly with respect to the relatively small number of complex contracts that require significant professional expertise beyond our in-house capability.

Improving the management of the National Park Service's concessions program is one of our very highest priorities, and we know that it is also one of yours. We take seriously the commitment to implementing the changes that are required by Title IV of the National Parks Omnibus Management Act of 1998. We believe that the actions that I have outlined here today are a further step toward the achievement of improved management of our concessions program.

This concludes my testimony. I would be happy to answer any questions you might have.