Legal, Administrative and Legislative News for the Federal Concessions Contractor Vol. 15, No.1 May 2015 ’98 CONCESSIONS ACT AMENDED In case you missed it, at the end of the last session, Congress passed amendments to the 1998 Concessions law. A copy of the statute showing all of the changes in red is attached. The statute, which used to be codified at 16 U.S.C. § 5951, et seq., can now be found at 54 U.S.C. § 101912, et seq. The vast majority of the amendments were minor, technical changes of no real substance. However, there are a few notable changes: • In what likely is good news for incumbents, under the amended statute, the length of a temporary contract that NPS can award without competition to avoid interruption of services is no longer limited to three years. • Service contracts for the provision solely of transportation are no longer limited to 10 years in length (this exacerbates the conflict with the Service Contract Act’s five-year limit). • There is a direction that NPS “consider the extent” to which they can make “employment and involvement” of Native Americans or Native American businesses a concession evaluation factor. (A word to the wise – consider involving Native American contractors and/or Native American subcontractors in your operations sooner rather than later. Depending on how this evolves, you may even have to consider joint venturing or setting up a mentor/protégé program with a Native American owned company). Federal Concessions Contractor is published periodically by Smith, Currie & Hancock LLP to update developments of interest to federal concessioners. It is not intended to provide legal advice. Legal advice may be given only when related to specific facts. Those desiring further information may contact any member of the concession contracts practice group: Alan Saltman, Chairman Washington, DC 202-452-2140 email@example.com Kathleen Hsu Washington, DC 202-452-2140 firstname.lastname@example.org Garrett Miller Atlanta, GA 404-582-8046 email@example.com Jay Houghton San Francisco, CA 800-832-6946 firstname.lastname@example.org Lisa Colon Heron Ft. Lauderdale, FL 954-761-8700 email@example.com For general information about the Firm’s attorneys and practice areas, please visit our website at http://www.smithcurrie.com © 2015 Smith, Currie & Hancock LLP ATLANTA CHARLOTTE FT. LAUDERDALE LOS ANGELES RALEIGH SAN FRANCISCO WASHINGTON DC DC TOUR BUS OPERATOR SEEKS RESOLICITATION OF NATIONAL MALL CONTRACT A Washington, D.C. tour bus operating company recently filed a bid protest against NPS’s award of a contract for tour bus operations on the National Mall to a company, the controlling interest of which changed after its proposal was submitted. The protestor argues that the change in ownership directly related to key factors in the evaluation, including the amount of control that the owner exercised over the awardee, the owner’s background, and the awardee’s financial ability to perform the contract. The protester asserted that the award made based on the pre-ownership change proposal was arbitrary and capricious and that NPS also violated its statutory obligation by failing to submit the proposed contract to the proper Senate committee for pre-award review. The company asked the court to issue an injunction directing NPS to cancel the award and issue a new Prospectus. Shortly after filing the complaint, the company sought a preliminary injunction. Thereafter, the parties entered into an agreement under which, pending a ruling on the preliminary injunction, the awardee would not make any significant investments relative to the contract, including investments in new electric buses. In a side note, two senior House Republicans (House Oversight Committee Chairman Jason Chaffetz (R-UT) and Subcommittee on Interior Chairman Cynthia Lummis (R-WY) have asked NPS why it awarded the contract to a foreign-owned company (City Sightseeing Washington D.C., Inc., d/b/a Big Bus Tours) and asserted that annual gross receipts were less than $5 million, thereby skirting the requirement that proposed contracts on which the gross receipts are $5 million or more be sent to the Senate 60 days before award. In the letter to NPS Director Jon Jarvis, the congressmen said that the award of a contract that anticipates gross receipts of only $5 million per year rings false because annual receipts for transportation on the Mall were $8.1 million in 2013. Word on the street is that NPS does not intend to directly respond to the inquiry on the basis that it involves a matter in litigation. AGENCY CAN PRECLUDE AN OFFEROR FROM USING CONSULTANTS TO WRITE ITS PROPOSAL Many of you have commented on the increasing cost of preparing proposals. Well, one agency tried to do something about it. A solicitation recently issued by the Department of Veterans Affairs contained a clause that responses to a sample task set out in the solicitation be prepared only by the offeror – not by consultants or outside proposal writers. One company protested this limitation as being unduly restrictive of competition. The argument was, however, rejected on the basis that the provision met a legitimate need of the agency, i.e., it was tied to a subfactor that was “designed to test the Offeror’s expertise and innovative capabilities to respond to the types of situations that may be encountered in performance of a contract” and, as such, it was reasonable to require that the responses be © 2015 Smith, Currie & Hancock LLP ATLANTA CHARLOTTE FT. LAUDERDALE LOS ANGELES RALEIGH SAN FRANCISCO WASHINGTON DC prepared by a company that would perform the contract, as opposed to outside consultants who have not been identified as members of the offeror’s team. The protester had argued that the provision did not accomplish this purpose because there was no assurance or requirement that the employees who prepared the response would actually work on the contract. This argument was also rejected on the dubious basis that, while not perfect, the provision in question did reduce the risk of unsuccessful contract performance. Clearly, the decision merely brushed off what was a real problem raised by the protester. Some Possible Solutions: • Require the authors of the section to be identified and to be the ones who manage the contract. (Substitutions permitted only for extraordinary reasons). • Require an oral, rather than a written, response from the team that will actually manage the contract. GAO REITERATES ITS JURISDICTION TO HEAR BID PROTESTS REGARDING SOME NPS CONCESSIONS CONTRACTS; BUT TOTALLY DENIES THE PROTEST A GAO bid protest decision issued last week in DNC Parks & Resorts at Yosemite, Inc. reveals that NPS is continuing its approach of thumbing its nose at GAO. That is, asserting once again, that GAO does not have jurisdiction over bid protests relating to concessions contracts, NPS once more refused to provide a report (i.e., a brief) to GAO on the substance of the protest. In response, GAO • Iterated its position that it, and not NPS, is the one to determine whether a protest falls within GAO’s jurisdiction; • Reaffirmed its view that where, under a concessions contract, NPS is acquiring goods and services of more than a de minimus value, it does have bid protest jurisdiction (in doing so, GAO rejected a contrary view expressed by at least one judge at the Court of Federal Claims); and • Decided the case solely on the basis of the documents submitted by the protester. Unfortunately for DNC, that was not sufficient. Among other things, DNC, the incumbent concessioner at Yosemite, argued that the estimate in the Prospectus regarding the value of Intangible Other Property that any new concessioner would be required to buy from DNC was misleading and prevented the government from properly comparing proposals. (The estimate in the Prospectus for Intangible Other © 2015 Smith, Currie & Hancock LLP ATLANTA CHARLOTTE FT. LAUDERDALE LOS ANGELES RALEIGH SAN FRANCISCO WASHINGTON DC Property was $3.5 million vs. DNC’s estimate of $51.2 million) (NPS’s estimate for all property was $30.6 million). GAO first found that any consideration of the reasonableness of the parties’ disputed positions regarding the value of Intangible Other Property would require it “to effectively resolve a dispute arising under the terms of DNC’s existing contract,” something that is not part of GAO’s protest function. Furthermore, noting that the Prospectus advised offerors of the disputed valuation and the need for them to make their own valuation, GAO also rejected DNC’s assertion that a final, determined value, rather than a mere estimate was necessary for purposes of competition. GAO even went so far as to find that DNC was not an interested party with the ability to challenge the alleged solicitation defect because it would not suffer any competitive harm if the estimate were erroneous, i.e., other offerors, but not DNC, must account for the contingency of negotiations and possible litigation over the final value of DNC’s property. Lastly, GAO rejected the argument that NPS’s supposedly unreasonable estimate will dilute DNC’s incumbent advantage, finding that a protest regarding this kind of harm does not fall within the scope of GAO’s bid protest jurisdiction. In sum, DNC was able to get its foot in the door at GAO, but once that occurred, GAO quickly showed it the door. © 2015 Smith, Currie & Hancock LLP ATLANTA CHARLOTTE FT. LAUDERDALE LOS ANGELES RALEIGH SAN FRANCISCO WASHINGTON DC TITLE IV—NATIONAL PARK SERVICE CONCESSIONS MANAGEMENT As passed in 1998, amended in 2014 16 U.S.C. § 5951 (now 54 U.S.C. § 101912) FINDINGS AND DECLARATION OF POLICY (a) FINDINGS.—In furtherance of section 100101(a), the Act of August 25, 1916 (commonly known as the National Park Service Organic Act; 16 U.S.C. 1 et seq.), which directs the Secretary to administer units of the National Park System in accordance with the fundamental purpose of conserving their scenery, wildlife, and natural and historic objects, and providing for their enjoyment in a manner that will leave them unimpaired for the enjoyment of future generations, the Congress hereby finds that the preservation and conservation of System unit park resources and values requires that such public accommodations, facilities, and services as that have to be provided within such those System units should be provided only under carefully controlled safeguards against unregulated and indiscriminate use, so that— (1) visitation will not unduly impair these resources and values; and (2) development of public accommodations, facilities, and services within such units can best be limited to locations that are consistent to the highest practicable degree with the preservation and conservation of the resources and values of such the System units. (b) Declaration of POLICY.—It is the policy of the Congress that the development of public accommodations, facilities, and services in System units of the National Park System shall be limited to those accommodations, facilities, and services that— (1) are necessary and appropriate for public use and enjoyment of the unit of the National Park System unit in which they are located; and (2) are consistent to the highest practicable degree with the preservation and conservation of the resources and values of the System unit. 16 U.S.C. § 5952 (now 54 U.S.C. § 101913) AWARD OF CONCESSION CONTRACTS In furtherance of the findings and policy stated in section 101912 402, and except as provided by this subchapter title or otherwise authorized by law, the Secretary shall utilize concessions contracts to authorize a person, corporation, or other entity to provide accommodations, facilities, and services to visitors to units of the National Park System. Such concessions contracts shall be awarded as follows: (1) COMPETITIVE SELECTION PROCESS.—Except as otherwise provided in this section, all proposed concessions contracts shall be awarded by the Secretary to the person, corporation, or other entity submitting the best proposal, as determined by the Secretary through a competitive selection process. Such competitive process shall include simplified procedures for small, individually-owned, concessions contracts. (2) SOLICITATION OF PROPOSALS.—Except as otherwise provided in this section, prior to awarding a new concessions contract (including renewals or extensions of existing concessions contracts) the Secretary (A) shall publicly solicit proposals for the concessions contract and, (B) in connection with such solicitation, the Secretary shall (i) prepare a prospectus and shall publish notice of its availability at least once in local or national newspapers or trade publications, by electronic means, or both and/or the Commerce Business Daily, as appropriate, and shall (ii) make the prospectus available upon request to all interested parties. (3) Information to be included in PROSPECTUS.—The prospectus shall include the following information: (A) The minimum requirements for such contract as set forth in paragraph (4). (B) The terms and conditions of any existing concessions contract relating to the services and facilities to be provided, including all fees and other forms of compensation provided to the United States by the concessioner. (C) Other authorized facilities or services which may be provided in a proposal. (D) Facilities and services to be provided by the Secretary to the concessioner, if any, including public access, utilities, and buildings. (E) An estimate of the amount of compensation, if any, due an existing concessioner from a new concessioner under the terms of a prior concessions contract. (F) A statement as to the weight to be given to each selection factor identified in the prospectus and the relative importance of such factors in the selection process. (G) Such other information related to the proposed concessions operation that as is provided to the Secretary pursuant to a concessions contract or is otherwise available to the Secretary, as the Secretary determines is necessary to allow for the submission of competitive proposals. (H) Where applicable, a description of a preferential right to the renewal of the proposed concessions contract held by an existing concessioner as set forth in paragraph (7). (4) MINIMUM REQUIREMENTS.—(A) No proposal shall be considered which fails to meet the minimum requirements as determined by the Secretary. Such minimum requirements shall include the following: (i) The minimum acceptable franchise fee or other forms of consideration to the Government. (ii) Any facilities, services, or capital investment required to be provided by the concessioner. (iii) Measures necessary to ensure the protection, conservation, and preservation of resources of the unit of the National Park System. (B) Rejection of proposal. - The Secretary shall reject any proposal, regardless of the franchise fee offered, if the Secretary determines that – (i) the person, corporation, or entity is not qualified, is not likely to provide satisfactory service, or that (ii) the proposal is not responsive to the objectives of protecting and preserving resources of the System unit of the National Park System and of providing necessary and appropriate facilities and services to the public at reasonable rates. (C) All proposals fail to meet minimum requirements or are rejected. -- If all proposals submitted to the Secretary either fail to meet the minimum requirements or are rejected by the Secretary, the Secretary shall establish new minimum contract requirements and re-initiate the competitive selection process pursuant to this section. (D) Terms and conditions materially amended or not incorporated in contract. -- The Secretary may not execute a concessions contract that which materially amends or does not incorporate the proposed terms and conditions of the concessions contract as set forth in the applicable prospectus. If proposed material amendments or changes are considered appropriate by the Secretary, the Secretary shall resolicit offers for the concessions contract incorporating such material amendments or changes. (5) SELECTION OF THE BEST PROPOSAL.— (A) In selecting the best proposal, the Secretary shall consider the following principal factors: (i) The responsiveness of the proposal to the objectives of protecting, conserving, and preserving resources of the System unit of the National Park System and of providing necessary and appropriate facilities and services to the public at reasonable rates. (ii) The experience and related background of the person, corporation, or entity submitting the proposal, including the past performance and expertise of such person, corporation or entity in providing the same or similar facilities or services. (iii) The financial capability of the person, corporation, or entity submitting the proposal. (iv) The proposed franchise fee, except that consideration of revenue to the United States shall be subordinate to the objectives of protecting, conserving, and preserving resources of the System unit of the National Park System and of providing necessary and appropriate facilities to the public at reasonable rates. (B) Secondary factors. -- The Secretary may also consider such secondary factors as the Secretary deems appropriate. (C) Development of regulations. -- In developing regulations to implement this title, the Secretary shall consider the extent to which plans for employment of Indians (including Native Alaskans) and involvement of businesses owned by Indians, Indian tribes, or Native Alaskans in the operation of a concession, contracts should be identified as a factor in the selection of a best proposal under this section. (6) CONGRESSIONAL NOTIFICATION.— (A) In general. -- The Secretary shall submit any proposed concessions contract with anticipated annual gross receipts in excess of $5,000,000 or a duration of more than 10 years to the Committee on Natural Resources of the House of Representatives and the Committee on Energy and Natural Resources of the Senate. (B) Waiting period. -- The Secretary shall not award any such proposed contract until at least 60 days subsequent to the notification of both committees. (7) PREFERENTIAL RIGHT OF RENEWAL.— (A) In general. -- Except as provided in subparagraph (B), the Secretary shall not grant a concessioner a preferential right to renew a concessions contract, or any other form of preference to a concessions contract. (B) Exception. -- The Secretary shall grant a preferential right of renewal to an existing concessioner with respect to proposed renewals of the categories of concessions contracts described by paragraph (8), subject to the requirements of that paragraph. (C) As used in this title, the term “preferential right of renewal” means that the Secretary, subject to a determination by the Secretary that the facilities or services authorized by a prior contract continue to be necessary and appropriate within the meaning of section 402, shall allow a concessioner qualifying for a preferential right of renewal the opportunity to match the terms and conditions of any competing proposal which the Secretary determines to be the best proposal for a proposed new concessions contract which authorizes the continuation of the facilities and services provided by the concessioner under its prior contract. (CD) A concessioner that which successfully exercises a preferential right of renewal in accordance with the requirements of this subchapter title shall be entitled to award of the proposed new concessions contract to which such preference applies. (8) OUTFITTER AND GUIDE SERVICES AND SMALL CONTRACTS.— (A) Application. -- The provisions of paragraph (7) shall apply only to the following: (i) Subject to subparagraph (B), outfitting and guide concessions contracts.concession contracts that solely authorize the provision of specialized backcountry outdoor recreation guide services that require the employment of specially trained and experienced guides to accompany System unit visitors in the backcountry so as to provide a safe and enjoyable experience for visitors who otherwise may not have the skills and equipment to engage in that activity. (ii) Subject to subparagraph (C), concessions contracts with anticipated annual gross receipts under $500,000. (B) Outfitting and guide concessioners. – (i) Description. -- For the purposes of this title, an “outfitting and guide concessions contract” means a concessions contract which solely authorizes the provision of specialized backcountry outdoor recreation guide services which require the employment of specially trained and experienced guides to accompany park visitors in the backcountry so as to provide a safe and enjoyable experience for visitors who otherwise may not have the skills and equipment to engage in such activity. Outfitting and guide concessioners, where otherwise qualified, include concessioners that which provide guided river running, hunting, fishing, horseback, camping, and mountaineering experiences. An outfitting and guide concessioner is entitled to a preferential right of renewal under this title only if— (i) the contract with the outfitting and guide concessioner does not grant the concessioner any interest, including any leasehold surrender interest or possessory interest, in capital improvements on lands owned by the United States within a System unit of the National Park System, other than a capital improvement constructed by a concessioner pursuant to the terms of a concessions contract prior to the date of the enactment of this title November 13, 1998, or constructed or owned by a concessioner or his or her the concessioner’s predecessor before the subject land was incorporated into the National Park System; (ii) the Secretary determines that the concessioner has operated satisfactorily during the term of the contract (including any extension thereof); and (iii) the concessioner has submitted a responsive proposal for a proposed new contract which that satisfies the minimum requirements established by the Secretary pursuant to paragraph (4). (C) Contract with estimated gross receipts of less than $500,000. -- A concessioner that holds a concessions contract that the Secretary estimates will result in gross annual receipts of less than $500,000 if renewed shall be entitled to a preferential right of renewal under this title if— (i) the Secretary has determined that the concessioner has operated satisfactorily during the term of the contract (including any extension thereof); and (ii) the concessioner has submitted a responsive proposal for a proposed new concessions contract which satisfies the minimum requirements established by the Secretary pursuant to paragraph (4). (9) NEW OR ADDITIONAL SERVICES.—The Secretary shall not grant a preferential right to a concessioner to provide new or additional services in a System unit of the National Park System. (10) SECRETARIAL AUTHORITY of Secretary not limited.—Nothing in this title shall be construed as limiting the authority of the Secretary to determine whether to issue a concessions contract or to establish its terms and conditions in furtherance of the policies expressed in this title subchapter. (11) EXCEPTIONS.—Notwithstanding the provisions of this section, the Secretary may award, without public solicitation, the following: (A) A temporary concessions contract. -- or an extension of an existing concessions contract for a term not to exceed 3 years in order to avoid interruption of services to the public at a System unit of the National Park System, except that prior to making such an award, the Secretary may shall take all reasonable and appropriate steps to consider alternatives to avoid such the interruption. (B) Contract in extraordinary circumstances. – The Secretary may award aA concessions contract in extraordinary circumstances where compelling and equitable considerations require the award of a concessions contract to a particular party in the public interest. Such award of a concessions contract under this subparagraph shall not be made by the Secretary until at least 30 days after – (i) publication in the Federal Register of notice of the Secretary's intention to award the contractdo so and the reasons for such action, and (ii) submission of notice to the Committee on Energy and Natural Resources of the Senate and the Committee on Natural Resources of the House of Representatives. 16 USCA § 5953 (now 54 U.S.C. § 101914) TERM OF CONCESSION CONTRACTS A concessions contract entered into pursuant to this title subchapter shall generally be awarded for a term of 10 years or less. However, the Secretary may award a contract for a term of up to 20 years if the Secretary determines that the contract terms and conditions, including the required construction of capital improvements, warrant a longer term. 16 USCA § 5954 (now 54 U.S.C. § 101915) PROTECTION OF CONCESSIONER INVESTMENT (a) Definitions.--In this section: (1) Capital improvement.--The term “capital improvement” means a structure, a fixture, or nonremovable equipment provided by a concessioner pursuant to the terms of a concession contract and located on land of the United States within a System unit. (2) Consumer Price Index.--The term “Consumer Price Index” means-- (A) the “Consumer Price Index--All Urban Consumers” published by the Bureau of Labor Statistics of the Department of Labor; or (B) if the Index is not published, another regularly published cost-of-living index approximating the Consumer Price Index. (ab) LEASEHOLD SURRENDER INTEREST UNDER NEW CONCESSIONS CONTRACTS in capital improvements.—On or after the date of the enactment of this title, a concessioner that constructs a capital improvement upon land owned by the United States within a System unit of the National Park System pursuant to a concessions contract shall have a leasehold surrender interest in such capital improvement subject to the following terms and conditions: (1) In general. -- A concessioner shall have a leasehold surrender interest in each capital improvement constructed by a concessioner under a concessions contract, consisting solely of a right to compensation for the capital improvement to the extent of the value of the concessioner's leasehold surrender interest in the capital improvement. (2) Pledge as security. -- A leasehold surrender interest— (A) may be pledged as security for financing of a capital improvement or the acquisition of a concessions contract when approved by the Secretary pursuant to this title subchapter; (B3) Transfer and relinquishment or waiver of interest. – A leasehold surrender interest shall be transferred by the concessioner in connection with any transfer of the concessions contract and may be relinquished or waived by the concessioner.; and (C4) Limit on extinguishing or taking interest. – A leasehold surrender interest shall not be extinguished by the expiration or other termination of a concessions contract and may not be taken for public use except on payment of just compensation. (35) Value of interest. -- The value of a leasehold surrender interest in a capital improvement shall be an amount equal to the initial value (construction cost of the capital improvement), increased (or decreased) in the same percentage increase (or decrease) as the percentage increase (or decrease) in the Consumer Price Index, from the date of making the investment in the capital improvement by the concessioner to the date of payment of the value of the leasehold surrender interest, less depreciation of the capital improvement as evidenced by the condition and prospective serviceability in comparison with a new unit of like kind. (46) Value of interest in certain new concessions contracts. – (A) How value is determined. -- Effective 9 years after the date of the enactment of this Act, the Secretary may provide, in any particular new concession contract that the Secretary estimates will have a leasehold surrender interest of more than $10,000,000, that the value of any leasehold surrender interest in a capital improvement shall be based on -- either (Ai) a reduction on an annual basis, in equal portions, over the same number of years as the time period associated with the straight line depreciation of the initial value (construction cost of the capital improvement), as provided by applicable Federal income tax laws and regulations in effect on the day before the date of the enactment of this Act November 12, 1998; or (Bii) such an alternative formula that is consistent with the objectives of this title subchapter. (B) When alternative formula may be used. -- The Secretary may only use such an alternative formula under subparagraph (A)(ii) only if the Secretary determines, after scrutiny of the financial and other circumstances involved in this the particular concession contract (including providing notice in the Federal Register and opportunity for comment), that such alternative formula is, compared to the standard method of determining value provided for in paragraph (35), necessary in order to provide a fair return to the Federal Government and to foster competition for the new contract by providing a reasonable opportunity to make a profit under the new contract. If no responsive offers are received in response to a solicitation that includes such an the alternative formula, the concession opportunity shall be resolicited with the leasehold surrender interest value as described in paragraph (35). (57) Where a concessioner, pursuant to the terms of a concessions contract, makes a capital improvement to an existing capital improvement in which the concessioner has a leasehold surrender interest, the cost of such additional capital improvement shall be added to the then current value of the concessioner's leasehold surrender interest. (bc) SPECIAL RULE FOR EXISTING POSSESSORY INTEREST existing before November 13, 1998.— (1) In general. -- A concessioner which that has obtained a possessory interest (as defined pursuant to the Act of October 9, 1965 Public Law 89–249 (commonly known as the National Park Service Concessions Policy Act; Public Law 89-249, 79 Stat. 969 16 U.S.C. 20 et seq.), as in effect on November 12, 1998the day before the date of the enactment of this Act, under the terms of a concessions contract entered into before that date shall, upon the expiration or termination of such contract, be entitled to receive compensation for such possessory interest improvements in the amount and manner as described by such concessions contract. Where such a possessory interest is not described in the existing contract, compensation of possessory interest shall be determined in accordance with the laws in effect on the day before the date of enactment of this Act November 12, 1998. (2) Existing concessioner awarded a new contract. -- In the event such prior A concessioner is awarded a new concessions contract after the effective date of this title to replaceing an existing concessions contract after November 13, 1998, the existing concessioner shall, instead of directly receiving such the possessory interest compensation, shall have a leasehold surrender interest in its existing possessory interest improvements under the terms of the new contract and shall carry over as the initial value of such leasehold surrender interest (instead of construction cost) an amount equal to the value of the existing possessory interest as of the termination date of the previous contract. In the event of a dispute between the concessioner and the Secretary as to the value of such the possessory interest, the matter shall be resolved through binding arbitration. (3) New concessioner awarded a contract. -- In the event that a new concessioner is awarded a concessions contract and is required to pay a prior concessioner for possessory interest in prior improvements, the new concessioner shall have a leasehold surrender interest in such the prior improvements. and the initial value in such leasehold surrender interest (instead of construction cost), shall be an amount equal to the value of the existing possessory interest as of the termination date of the previous contract. (4) De novo review of value determination.--If the Secretary, or either party to a value determination proceeding conducted under a Service concession contract issued before November 13, 1998, considers that the value determination decision issued pursuant to the proceeding misinterprets or misapplies relevant contractual requirements or their underlying legal authority, the Secretary or either party may seek, within 180 days after the date of the decision, de novo review of the value determination decision by the United States Court of Federal Claims. The Court of Federal Claims may make an order affirming, vacating, modifying or correcting the determination decision. (cd) TRANSITION TO SUCCESSOR CONCESSIONER.—Upon expiration or termination of a concessions contract entered into after the effective date of this title, a concessioner shall be entitled under the terms of the concessions contract to receive from the United States or a successor concessioner the value of any leasehold surrender interest in a capital improvement as of the date of such expiration or termination. A successor concessioner shall have a leasehold surrender interest in such capital improvement under the terms of a new concession contract and the initial value of the leasehold surrender interest in such the capital improvement (instead of construction cost) shall be the amount of money the new concessioner is required to pay the prior concessioner for its leasehold surrender interest under the terms of the prior concessions contract. (d) TITLE TO IMPROVEMENTS.—Title to any capital improvement constructed by a concessioner on lands owned by the United States in a System unit of the National Park System shall be vested in the United States. (e) DEFINITIONS.—For purposes of this section: (1) CONSUMER PRICE INDEX.—The term “Consumer Price Index” means the “Consumer Price Index—All Urban Consumers” published by the Bureau of Labor Statistics of the Department of Labor, unless such index is not published, in which case another regularly published cost-of-living index approximating the Consumer Price Index shall be utilized by the Secretary; and (2) CAPITAL IMPROVEMENT.—The term “capital improvement” means a structure, fixture, or nonremovable equipment provided by a concessioner pursuant to the terms of a concessions contract and located on lands of the United States within a unit of the National Park System. (f) SPECIAL REPORTING REQUIREMENT.—Not later than 7 years after the date of the enactment of this Act, the Secretary shall submit a report to the Committee on Energy and Natural Resources of the Senate and the Committee on Resources of the House of Representatives containing a complete analysis of the concession program as well as— (1) an assessment of competition in the solicitation of prospectuses, fair and/or increased return to the Government, and improvement of concession facilities and infrastructure; and (2) an assessment of any problems with the management and administration of the concession program that are a direct result of the implementation of the provisions of this title. 16 U.S.C. § 5955 (now 54 U.S.C. § 101916) REASONABLENESS OF RATES AND CHARGES (a) IN GENERAL.—Each A concessions contract shall permit the concessioner to set reasonable and appropriate rates and charges for facilities, goods, and services provided to the public, subject to approval under subsection (b). (b) APPROVAL BY SECRETARY REQUIRED.— (1) Factors to consider. -- A concessioner's rates and charges to the public shall be subject to approval by the Secretary. The approval process utilized by the Secretary shall be as prompt and as unburdensome to the concessioner as possible and shall rely on market forces to establish reasonableness of rates and charges to the maximum extent practicable. The Secretary shall approve rates and charges that the Secretary determines to be reasonable and appropriate. Unless otherwise provided in the contract, the reasonableness and appropriateness of rates and charges shall be determined primarily by comparison with those rates and charges for facilities, goods, and services of comparable character under similar conditions, with due consideration to the following factors and other factors deemed relevant by the Secretary: (A) length of season, (B) peakloads, (C) average percentage of occupancy, (D) accessibility, (E) availability and costs of labor and materials, and (F) type of patronage. (2)Such rates and charges may not exceed the market rates and charges for comparable facilities, goods, and services, after taking into account the factors referred to in the preceding sentence paragraph (1). (c) IMPLEMENTATION OF RECOMMENDATIONS.—Not later than 6 months after receiving recommendations from the Advisory Board established under section 409(a) regarding concessioner rates and charges to the public, the Secretary shall implement the recommendations or report to the Congress the reasons for not implementing the recommendations. 16 U.S.C. § 5956 (now 54 U.S.C. § 101917) FRANCHISE FEES. (a) IN GENERAL.—A concessions contract shall provide for payment to the Federal government of a franchise fee or such other monetary consideration as determined by the Secretary, upon consideration of the probable value to the concessioner of the privileges granted by the particular contract involved. Such probable value shall be based upon a reasonable opportunity for net profit in relation to capital invested and the obligations of the contract. Consideration of revenue to the United States shall be subordinate to the objectives of protecting and preserving park areas System units and of providing necessary and appropriate services for visitors at reasonable rates. (b) AMOUNT OF FRANCHISE FEE Provisions to be specified in contract.—The amount of the franchise fee or other monetary consideration paid to the United States for the term of the concessions contract shall be specified in the concessions contract shall be specified in the concession contract and may only be modified only to reflect extraordinary unanticipated changes from the conditions anticipated as of the effective date of the contract. The Secretary shall include in concessions contracts with a term of more than 5 years a provision which that allows reconsideration of the franchise fee at the request of the Secretary or the concessioner in the event of such extraordinary unanticipated changes. Such The provision shall provide for binding arbitration in the event that the Secretary and the concessioner are unable to agree upon an adjustment to the franchise fee in these circumstances. (c) SPECIAL ACCOUNT in Treasury.— (1) All franchise fees (and other monetary consideration) paid to the United States pursuant to concessions contracts shall be deposited into a special account established in the Treasury of the United States. Twenty percent of the funds deposited in the special account shall be available for expenditure by the Secretary, without further appropriation, to support activities throughout the National Park System regardless of the System unit of the National Park System in which the funds were collected. The funds deposited into the special account shall remain available until expended. (d) SUBACCOUNT FOR EACH UNIT.—There shall be established within the special account required under subsection (c) a subaccount for each unit of the National Park System. Each subaccount shall be credited with 80 percent of the franchise fees (and other monetary consideration) collected at a single System unit of the National Park System under concessions contracts. The funds credited to the subaccount for a unit of the National Park System shall be available for expenditure by the Secretary, without further appropriation, for use at the System unit for visitor services and for purposes of funding high-priority and urgently necessary resource management programs and operations. The funds credited to a subaccount shall remain available until expended. 16 U.S.C. § 5957 (now 54 U.S.C. § 101918) TRANSFER OR CONVEYANCE OF CONCESSIONS CONTRACTS OR LEASEHOLD SURRENDER INTERESTS (a) APPROVAL OF THE SECRETARY.—No concessions contract or leasehold surrender interest may be transferred, assigned, sold, or otherwise conveyed or pledged by a concessioner without prior written notification to, and approval by, the Secretary. (b) CONDITIONS.—The Secretary shall approve a transfer or conveyance described in subsection (a) unless the Secretary finds that— (1) the individual, corporation or entity seeking to acquire a concessions contract is not qualified or able to satisfy the terms and conditions of the concessions contract (2) such the transfer or conveyance would have an adverse impact on – (A) the protection, conservation, or preservation of the resources of the System unit of the National Park System; or (B) the provision of necessary and appropriate facilities and services to visitors at reasonable rates and charges; and (3) the terms of such transfer or conveyance are likely, directly or indirectly, to – (A) reduce the concessioner's opportunity for a reasonable profit over the remaining term of the contract, (B) adversely affect the quality of facilities and services provided by the concessioner, or (C) result in a need for increased rates and charges to the public to maintain the quality of such facilities and services. (c) TRANSFERModification or renegotiation of TERMS.—The terms and conditions of any concession contract under this section shall not be subject to modification or open to renegotiation by the Secretary because of a transfer or conveyance described in subsection (a), unless such the transfer or conveyance would have an adverse impact as described in paragraph (2) of subsection (b)(2). 16 U.S.C. § 5958 (now 54 U.S.C. § 101919) NATIONAL PARK SERVICE CONCESSIONS MANAGEMENT ADVISORY BOARD. (a) ESTABLISHMENT and purpose.—There is hereby established a National Park Service Concessions Management Advisory Board (in this title referred to as the “Advisory Board”) whose purpose shall be to advise the Secretary and National Park Service on matters relating to management of concessions in the National Park System. (b) DUTIES.— (1) ADVICE.—The Advisory Board shall advise on each of the following: (A) Policies and procedures intended to assure that services and facilities provided by concessioners – (i) are necessary and appropriate, (ii) meet acceptable standards at reasonable rates with a minimum of impact on park System unit resources and values, and (iii) provide the concessioners with a reasonable opportunity to make a profit. (B) Ways to make National Park Service concessions programs and procedures more cost effective, more process efficient, less burdensome, and timelier. (2) RECOMMENDATIONS.—The Advisory Board shall make recommendations to the Secretary regarding each of the following: (A) National Park The Service contracting with the private sector to conduct appropriate elements of concessions management and providing recommendations to make (B) Ways to make the review or approval of concessioner rates and charges to the public more efficient, less burdensome, and timelier the review or approval of concessioner rates and charges to the public. (BC) The nature and scope of products which qualify as Indian, Alaska Native, and Native Hawaiian handicrafts within this meaning of this titlesubchapter. (C) The allocation of concession fees. The initial recommendations under subparagraph (A) relating to rates and charges shall be submitted to the Secretary not later than one year after the first meeting of the Board. (3) ANNUAL REPORT.—The Advisory Board, commencing with the first anniversary of its initial meeting, shall provide an annual report on its activities to the Committee on Natural Resources of the United States House of Representatives and the Committee on Energy and Natural Resources of the United States Senate. (c) ADVISORY BOARD MEMBERSHIP.—Members of the Advisory Board shall be appointed on a staggered basis by the Secretary for a term not to exceed 4 years and shall serve at the pleasure of the Secretary. The Advisory Board shall be comprised of not more than seven7 individuals appointed from among citizens of the United States not in the employment of the Federal Government and not in the employment of or having an interest in a National Park Service concession. Of the seven7 members of the Advisory Board— (1) one member shall be privately employed in the hospitality industry and have both broad knowledge of hotel or food service management and experience in the parks and recreation concessions business; (2) one member shall be privately employed in the tourism industry; (3) one member shall be privately employed in the accounting industry; (4) one member shall be privately employed in the outfitting and guide industry; (5) one member shall be a State government employee with expertise in park concession management; (6) one member shall be active in promotion of traditional arts and crafts; and (7) one member shall be active in a nonprofit conservation organization involved in parks and recreation programs. (d) TERMINATION.—The Advisory Board shall continue to exist until December 31, 2008. In all other respects, it shall be subject to the provisions of the Federal Advisory Committee Act. (ed) SERVICE ON ADVISORY BOARD.—Service of an individual as a member of the Advisory Board shall not be considered as service or employment bringing such individual within the provisions of any Federal law relating to conflicts of interest or otherwise imposing restrictions, requirements, or penalties in relation to the employment of persons, the performance of services, or the payment or receipt of compensation in connection with claims, proceedings, or matters involving the United States. Service as a member of the Advisory Board shall not be considered service in an appointive or elective position in the Government for purposes of section 8344 of title 5, United States Code, or other comparable provisions of Federal law. (e) TERMINATION.—The Advisory Board shall continue to exist until December 31, 2009. In all other respects, it shall be subject to the provisions of the Federal Advisory Committee Act (5 U.S.C. App.). 16 U.S.C. § 5959 (now 54 U.S.C. § 101920) CONTRACTING FOR SERVICES (a) CONTRACTING AUTHORIZED.— (1) Management elements for which contract required to maximum extent practicable. -- To the maximum extent practicable, the Secretary shall contract with private entities to conduct or assist in those elements of the management of the National Park Service concessions program considered by the Secretary to be suitable for non-Federal performance. Such Those management elements include each of the following: (A) Health and safety inspections. (B) Quality control of concessions operations and facilities. (C) Strategic capital planning for concessions facilities. (D) Analysis of rates and charges to the public. (2) Management elements for which contract allowed. -- The Secretary may also contract with private entities to assist the Secretary with each of the following: (A) Preparation of the financial aspects of prospectuses for National Park Service concessions contracts. (B) Development of guidelines for a national park system capital improvement and maintenance program for all concession occupied facilities. (C) Making recommendations to the Director of the National Park Service regarding the conduct of annual audits of concession fee expenditures. (b) OTHER MANAGEMENT ELEMENTS.—The Secretary shall also consider, taking into account the recommendations of the Advisory Board, contracting out other elements of the concessions management program, as appropriate. (c) CONDITIONAuthority of Secretary not diminished.—Nothing in this section shall diminish the governmental responsibilities and authority of the Secretary to administer concessions contracts and activities pursuant to this title and the Act of August 25, 1916 (commonly known as the National Park Service Organic Act; 16 U.S.C. 1 et seq.) this subchapter and section 100101(a), chapter 1003, and sections 100751(a), 100752, 100753, and 102101 of this title. The Secretary reserves the right to make the final decision or contract approval on contracting services dealing with the management of the National Park Service concessions program under this section. 16 U.S.C. § 5960 (now 54 U.S.C. § 101921) MULTIPLE CONTRACTS WITHIN A SYSTEM UNIT If multiple concessions contracts are awarded to authorize concessioners to provide the same or similar outfitting, guiding, river running, or other similar services at the same approximate location or resource within a specific national parkSystem unit, the Secretary shall establish a comparable franchise fee structure for all such same those contracts or similar contracts, except that the terms and conditions of any existing concessions contract shall not be subject to modification or open to renegotiation by the Secretary because of an award of a new contract at the same approximate location or resource. 16 USCA § 5961 SEC. 412. SPECIAL RULE FOR TRANSPORTATION CONTRACTING SERVICES. Notwithstanding any other provision of law, a service contract entered into by the Secretary for the provision solely of transportation services in a unit of the National Park System shall be no more than 10 years in length, including a base period of 5 years and annual extensions for an additional 5–year period based on satisfactory performance and approval by the Secretary. 16 U.S.C. § 5962 (now 54 U.S.C. § 101922) USE OF NONMONETARY CONSIDERATION IN CONCESSIONS CONTRACTS Section 321 of the Act of June 30, 1932 (40 U.S.C. 303b), relating to the leasing of buildings and properties of the United States, shall not apply to contracts awarded by the Secretary pursuant to this title. Section 1302 of title 40 shall not apply to concession contracts awarded by the Secretary pursuant to this subchapter. 16 U.S.C. § 5963 (now 54 U.S.C. § 101923) RECORDKEEPING REQUIREMENTS (a) IN GENERAL.—Each Any concessioner and any subconcessioner shall keep such records as the Secretary may prescribe to enable the Secretary to determine that all terms of the concessions contract have been and are being faithfully performed., and the Secretary and any duly authorized representative of the Secretary shall, for the purpose of audit and examination, have access to suchthose records and to other books, documents, and papers records of the concessioner or subconcessioner pertinent to the concession contract and all terms and conditions thereofof the concession contract. (b) ACCESS TO RECORDS by Comptroller General.—The Comptroller General or any duly authorized representative of the Comptroller General shall, until the expiration of 5 calendar years after the close of the business year of each concessioner or subconcessioner, have access to and the right to examine any pertinent books, papers, documents and records described in subsection (a) of the concessioner or subconcessioner related to the contract or contracts involved. 16 U.S.C. § 5964 (now 54 U.S.C. § 101924) PROMOTION OF THE SALE OF INDIAN, ALASKA NATIVE, NATIVE SAMOAN, AND NATIVE HAWAIIAN HANDICRAFTS. (a) IN GENERAL.—Promoting the sale of authentic United States Indian, Alaskan Native, Native Samoan, and Native Hawaiian handicrafts relating to the cultural, historical, and geographic characteristics of System units of the National Park System is encouraged, and the Secretary shall ensure that there is a continuing effort to enhance the handicraft trade where it exists and establish the trade in appropriate areas where such trade currently does not exist. (b) EXEMPTION FROM FRANCHISE FEE.—In furtherance of these purposes of subsection (a), the revenue derived from the sale of United States Indian, Alaska Native, Native Samoan, and Native Hawaiian handicrafts shall be exempt from any franchise fee payments under this title. 16 U.S.C. § 5965 (now 54 U.S.C. § 101926) REGULATIONS. (a) In general. -- As soon as practicable after the effective date of this title, the Secretary shall promulgate prescribe regulations appropriate for its the implementation of this subchapter (b) Contents. -- The Among other matters, such regulations (1) shall include appropriate provisions to ensure that concession services and facilities to be provided in a System unit of the National Park System are not segmented or otherwise split into separate concessions contracts for the purposes of seeking to reduce anticipated annual gross receipts of a concessions contract below $500,000; and The Secretary (2) shall also promulgate regulations which further define the term “United States Indian, Alaskan Native, and Native Hawaiian handicrafts” for the purposes of this title subchapter. 16 U.S.C. § 5966 (now 54 U.S.C. § 101925) COMMERCIAL USE AUTHORIZATIONS. (a) IN GENERAL.—To the extent specified in this section, the Secretary, upon request, may authorize a private person, corporation, or other entity to provide services to visitors to System units of the National Park System through a commercial use authorization. Such A commercial use authorizations shall not be considered asto be a concessions contracts pursuant to this title under this subchapter and no nor shall other sections of this title subchapter shall be applicable to such a commercial use authorizations except where expressly so stated. (b) CRITERIA FOR ISSUANCE OF AUTHORIZATIONS.— (1) REQUIRED DETERMINATIONS.—The authority of this section may be used only to authorize provision of services that the Secretary determines – (A) will have minimal impact on resources and values of the a System unit of the National Park System and (B) are consistent with the purpose for which the System unit was established and with all applicable management plans and park Service policies and regulations. (2) ELEMENTS OF Commercial Use AUTHORIZATION.—The Secretary shall— (A) require payment of a reasonable fee for issuance of an commercial use authorization under this section, such the fees to remain available without further appropriation to be used, at a minimum, to recover associated management and administrative costs; (B) require that the provision of services under such an commercial use authorization be accomplished in a manner consistent to the highest practicable degree with the preservation and conservation of park System unit resources and values; (C) take appropriate steps to limit the liability of the United States arising from the provision of services under such an commercial use authorization; and (D) have no authority under this section to issue more commercial use authorizations than are consistent with the preservation and proper management of park System unit resources and values, (E) and shall establish such other conditions for issuance of such an commercial use authorization as that the Secretary determines to be appropriate for the protection of visitors, provision of adequate and appropriate visitor services, and protection and proper management of the System unit resources and values of the park. (c) LIMITATIONS.—Any commercial use authorization issued under this section shall be limited to— (1) commercial operations with annual gross receipts of not more than $25,000 resulting from services originating and provided solely within a System unit of the National Park System pursuant to such the commercial use authorization; (2) the incidental use of resources of the System unit by commercial operations which that provide services originating and terminating outside of the boundaries of the System unit; or (3)(A) such uses by organized children's camps, outdoor clubs and nonprofit institutions (including back country use) and (B) such other uses as the Secretary determines appropriate. (d) Nonprofit institutions are not required to obtain commercial use authorizations unless taxable income is derived by the institution from the authorized use. (de) PROHIBITION ON CONSTRUCTION.—An commercial use authorization issued under this section shall not provide for the construction of any structure, fixture, or improvement on federally-owned lands within the boundaries of a System unit of the National Park System. (ef) DURATION.—The term of any commercial use authorization issued under this section shall not exceed 2 years. No preferential right of renewal or similar provisions for renewal shall be granted by the Secretary. (f) OTHER CONTRACTS.—A person, corporation, or other entity seeking or obtaining an commercial use authorization pursuant to this section shall not be precluded from also submitting a proposals for concessions contracts.