Proposed Concession Contract for Shenandoah National Park-Alternative Formula for Calculating Leasehold Surrender Interest, 1723-1725 [2012-279]
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Federal Register / Vol. 77, No. 7 / Wednesday, January 11, 2012 / Notices
Posey County
I.O.O.F. and Barker Buildings, 402–406 Main
St.,Vernon, 85002133
[FR Doc. 2012–289 Filed 1–10–12; 8:45 am]
BILLING CODE 4312–51–P
DEPARTMENT OF THE INTERIOR
National Park Service
[NPS–NCR–POHE–0911–7946; 3991–0101–
SZS]
Notice of Availability, Potomac
Heritage National Scenic Trail
National Park Service, Interior.
Notice of Availability of a
‘‘Foundation for Planning,
Administration, Management and
Interpretation of Potomac Heritage
National Scenic Trail Segments and for
Coordination among Trail Segment
Management Partners.’’
AGENCY:
ACTION:
Pursuant to the National
Trails System Act of 1968 (as amended),
the National Park Service (NPS)
announces the availability of a
‘‘Foundation for Planning,
Administration, Management and
Interpretation of Potomac Heritage
National Scenic Trail Segments and for
Coordination among Trail Segment
Management Partners (Foundation).’’
This document is intended to serve as
a resource for NPS staff and Potomac
Heritage National Scenic Trail (Trail)
segment management partners and to
help create continuity of experience
throughout the Trail network.
DATES: The ‘‘Foundation’’ is available
for review and reference on the NPS
Web site as of January 11, 2012.
ADDRESSES: The ‘‘Foundation’’ and
appendices are available online at
https://www.nps.gov/pohe/parkmgmt/
planning.htm.
SUMMARY:
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FOR FURTHER INFORMATION CONTACT:
Donald E. Briggs, Superintendent,
Potomac Heritage National Scenic Trail,
National Capital Region, National Park
Service, at (304) 535–4016 or by email
at don_briggs@nps.gov.
SUPPLEMENTARY INFORMATION: In 1983,
based on a feasibility study completed
by the Bureau of Outdoor Recreation in
1974, Congress amended the National
Trails System Act of 1968, designating
a corridor for the Trail between the
mouth of the Potomac River and the
Allegheny Highlands in western
Pennsylvania. Based on extensive
coordination among the staff of local,
regional, state and other federal
agencies; representatives of non-profit
organizations; volunteers; and other
Trail stakeholders, the Trail network
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today includes over 830 miles of
existing and planned Trail segments for
non-motorized travel. Communities
have invested in the Trail concept for a
variety of reasons, including a desire to
increase opportunities for outdoor
recreation, non-motorized
transportation, education and/or
heritage tourism.
The Foundation assembles in one
document decisions and
recommendations made over the past 11
years and establishes a basis for future
local, regional, state and Federal
planning; NPS administration of the
Federal interest in the Trail;
management of individual Trail
segments, including Trail segment
marking; interpretation; coordination
among Trail management partners; and
creating ‘‘continuity of experience’’
through the diverse Trail network.
The document recognizes a change in
authorizing legislation—Trail segments
are recognized through cooperative
management agreements between the
NPS and Trail segment management
partners, replacing an application
process—and emphasizes that Trail
blazes, where used to mark Trail routes,
should employ a color used in the
official Trail marker. The Foundation,
along with regional and state plans to be
added in the future as appendices, will
serve as a comprehensive management
plan for the Trail network, will reflect
accurately the Trail as a set of
partnerships, and will provide a means
to address efficiently the need for
adaptive planning and management.
Dated: July 21, 2011.
Stephen E. Whitesell
Regional Director, National Capital Region.
[FR Doc. 2012–280 Filed 1–10–12; 8:45 am]
BILLING CODE P
DEPARTMENT OF THE INTERIOR
National Park Service
Proposed Concession Contract for
Shenandoah National Park—
Alternative Formula for Calculating
Leasehold Surrender Interest
National Park Service, Interior.
Notice.
AGENCY:
ACTION:
The National Park Service
invites public comments on a proposed
alternative formula for the value of
leasehold surrender interest to be
included in its proposed ten-year
concession contract for Shenandoah
National Park. The contract will cover
operation of the lodging, food and
beverage, retail sales, gasoline, and
horseback riding operations at the Park.
SUMMARY:
PO 00000
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1723
Public comments will be
accepted on or before February 10, 2012.
ADDRESSES: Send comments to Ms. Jo A.
Pendry, Chief, Commercial Services
Program, National Park Service, 1201
Eye Street NW., 11th Floor, Washington,
DC 20005 or via email at
jo_pendry@nps.gov or via fax at (202)
371–2090.
FOR FURTHER INFORMATION CONTACT: Jo
A. Pendry, (202) 513–7156.
SUPPLEMENTARY INFORMATION:
The National Park Service will be
soliciting proposals for operation of the
lodging, food and beverage, retail sales,
gasoline, and horseback riding
operations at Shenandoah National Park
in 2012. The new contract is intended
to be for a term of 10 years and will
include an alternative formula for
calculating leaseholder surrender
interest. In this notice, we are soliciting
comments on our use of this alternative
formula. While we aren’t required by
law to solicit comments on this
alternative formula, we are providing an
opportunity for public comment
because this is only the second time that
we have proposed using an alternative
LSI formula.
Leasehold surrender interest (LSI) is
the interest in real property
improvements that a concessioner
provides under an NPS concession
contract. Public Law 105–391 of 1998
(the 1998 Act) established the standard
LSI valuation formula. The formula is
generally as follows:
• The initial construction cost of the
related capital improvement.
• adjusted by the percentage increase
or decrease in the Consumer Price Index
(CPI).
• less physical depreciation of the
related capital improvement.
The 1998 Act also allows alternative
LSI-value formulas for contracts with an
LSI value over $10 million. Because the
new contract for Shenandoah National
Park will exceed $10 million, we are
proposing to use an alternative LSI
formula. Under our proposed alternative
formula, the LSI value of all eligible
capital improvements will be
depreciated annually, in equal portions,
on a forty (40) year, straight-line basis
during the contract’s 10-year term.
DATES:
We Have Made Two Determinations
We have determined, subject to
consideration of public comments, that:
• The proposed alternative LSI
formula, in comparison to the standard
LSI formula, is necessary to provide a
fair return to the Government and to
foster competition for the new contract
by providing a reasonable opportunity
for profit to the new concessioner.
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Federal Register / Vol. 77, No. 7 / Wednesday, January 11, 2012 / Notices
pmangrum on DSK3VPTVN1PROD with NOTICES
• The proposed alternative LSI
formula is consistent with the objectives
of the 1998 Act, particularly, as
discussed below, with respect to the fair
return it will provide to the Government
and the new concessioner and the
enhanced competition it will foster.
The 1998 Act does not require these
determinations and this Federal
Register notice for alternative LSI
formulas (such as the one we propose)
that are based on annual straight line
depreciation of the initial value as
provided under 1998 Federal income
tax laws and regulations. However,
because this is only the second time that
we have proposed using an alternative
LSI formula, we have made these
determinations and are publishing this
notice to solicit public comment.
If we adopt the alternative LSI
formula, it will apply only to the new
contract, SHEN001–13. We have made
no decision to apply the proposed LSI
formula or any other LSI alternative to
future concession contracts. If we
consider using an alternative LSI
formula for any other contracts, we will
ask for public comments if required or
appropriate.
First Determination: Fair Return to the
Government
We have determined, subject to
consideration of public comments, that
the proposed alternative LSI formula is
necessary to provide a fair return to the
Government, as well as helping to
provide a fair return to the new
concessioner.
We consider that ‘‘fair return’’ to the
Government includes the requirement of
the 1998 Act that we include in
concession contracts a franchise fee
payable to the Government that is based
upon consideration of the probable
value to the concessioner of the
privileges granted by the contract.
However, under the standard LSI
formula, the amount of money that we
would pay (directly or indirectly) for
LSI as of the expiration of the new
contract is inevitably speculative as of
the time of contract solicitation, contract
award, and during the contract term.
This is because we and prospective
concessioners must estimate in advance
the future CPI rate, the amount of
depreciation that will occur over the
term of the contract, and the cost to cure
the depreciation.
Thus, if we use the standard LSI
formula to establish the required
minimum franchise fee for the new
contract, that fee will reflect speculative
estimates of CPI and depreciation rates
over the term of the contract. Likewise,
when a prospective concessioner offers
to meet or exceed the minimum
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15:02 Jan 10, 2012
Jkt 226001
franchise fee that we would establish
under the standard LSI formula, this
business decision relies on speculative
estimates of future CPI and depreciation
rates. A more dependable LSI value will
allow us to better project the long-term
cost of the concessioner’s investment
and to calculate a franchise fee that
provides a fair return.
For these reasons, we consider it
necessary to include the proposed
alternative LSI formula in the new
contract in order to provide a fair return
to the Government.
Second Determination: Fostering
Competition
Elimination of the speculative nature
of LSI value by using the proposed LSI
formula is also considered necessary to
foster competition for the new contract
by providing a reasonable opportunity
for the concessioner to make a profit
under the new contract. This is because
prospective concessioners will know
with a high degree of certainty (subject
only to estimates of the value of any
new capital improvements constructed
or installed during the term of the
contract) how much money they will be
paid for initial LSI upon the expiration
of the new contract. The proposed LSI
formula eliminates speculation
regarding CPI and depreciation required
under the standard LSI formula. The
resulting lower risk and greater certainty
in the business opportunity provides the
concessioner reasonable opportunity for
profit under the terms of the new
contract. It should also encourage
businesses to apply for the new
contract, thereby fostering competition.
Private firms not familiar with the
NPS concession program have indicated
that the complexities and uncertainty of
the standard LSI formula have deterred
them from submitting offers for
concessions. We believe that using the
proposed alternative LSI formula in the
new contract will foster competition by
providing interested entities with a
reasonable opportunity for profit that,
with respect to LSI, is assured,
understandable, and more comparable
to practices in the private sector.
In addition, the estimated lower LSI
payment under the alternative formula
(as opposed to a higher estimated value
provided by the standard LSI formula)
allows us to charge a lower minimum
franchise fee. This will ensure the
concessioner greater cash flows during
the term of the contract, in contrast to
the standard LSI formula’s higher (and
uncertain) LSI payment at the expiration
of the contract. Since many prospective
concessioners will likely prefer the
higher cash flows throughout the
contract term under the proposed LSI
PO 00000
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formula, the alternative formula should
foster competition for the new contract.
The proposed LSI formula will also
enhance competition for the concession
contract that will succeed the new
contract. This is because the final value
of the contract’s LSI should be
significantly lower than it would be
under the standard LSI formula, thereby
lowering the amount of LSI purchase
money needed by a prospective new
concessioner. This lower entry cost
should encourage competitive proposals
from prospective concessioners.
The proposed LSI formula should not
materially affect the new concessioner’s
projected rate of return under the new
contract. This is because, in developing
the new contract’s minimum franchise
fee, we assessed projected revenues and
expenses and used industry standards to
estimate a fair return to the new
concessioner. This estimate includes the
cost of acquiring existing LSI.
The new contract’s minimum
franchise fee thus reflects the financial
consequences of the proposed LSI
formula. This means that the estimated
fair return to the new concessioner
would be approximately the same
whether the new contract included the
standard LSI formula or the proposed
LSI formula (taking into account the
time value of money). The proposed LSI
formula will not materially change the
projected fair return to the new
concessioner, but will reduce the
speculative nature of LSI value under
the standard formula. With respect to
the rate of return, the impact of the use
of the proposed LSI formula is neutral,
but not adverse, to the requirement of
fostering competition.
Public Availability of Further
Information
Complete details and further
explanation of the proposed LSI formula
will be in the proposed prospectus for
the new contract that is publically
available at https://www.nps.gov/
commercialservices. In the interest of
time, we may issue a prospectus for the
new contract in FedBizOpp.gov that
incorporates the proposed LSI formula.
If consideration of public comments in
response to this notice causes us to alter
the proposed alternative LSI formula,
we will amend the prospectus
accordingly (through publication in
FedBizOpp.gov) before the deadline for
submission of proposals.
We invite your comments and will
consider all comments that we receive
by the deadline in the DATES section of
this notice.
Before including your address, phone
number, email address, or other
identifying information in your
E:\FR\FM\11JAN1.SGM
11JAN1
Federal Register / Vol. 77, No. 7 / Wednesday, January 11, 2012 / Notices
comment, you should be aware that
your entire comment—including your
personal identifying information—may
be made publicly available at any time.
While you can ask us in your comment
to withhold your personal identifying
information from public review, we
cannot guarantee that we will be able to
do so.
Peggy O’Dell,
Deputy Director, Operations.
[FR Doc. 2012–279 Filed 1–10–12; 8:45 am]
BILLING CODE P
INTERNATIONAL TRADE
COMMISSION
[Investigation No. 337–TA–824]
Certain Blu-Ray Disc Players,
Components Thereof and Products
Containing Same; Notice of Institution
of Investigation
U.S. International Trade
Commission.
ACTION: Notice.
AGENCY:
Notice is hereby given that a
complaint was filed with the U.S.
International Trade Commission on
December 5, 2011, under section 337 of
the Tariff Act of 1930, as amended, 19
U.S.C. 1337, on behalf of Walker Digital,
LLC, of Stamford, Connecticut. Letters
supplementing the complaint were filed
on December 21, 2011, and December
22, 2011. The complaint, as
supplemented, alleges violations of
section 337 based upon the importation
into the United States, the sale for
importation, and the sale within the
United States after importation of
certain Blu-ray disc players,
components thereof and products
containing same by reason of
infringement of certain claims of U.S.
Patent No 6,263,505 (‘‘the ‘505 patent’’).
The complaint further alleges that an
industry in the United States exists as
required by subsection (a)(2) of section
337.
The complainant requests that the
Commission institute an investigation
and, after the investigation, issue an
exclusion order and cease and desist
orders.
SUMMARY:
The complaint, except for
any confidential information contained
therein, is available for inspection
during official business hours (8:45 a.m.
to 5:15 p.m.) in the Office of the
Secretary, U.S. International Trade
Commission, 500 E Street SW., Room
112, Washington, DC 20436, telephone
(202) 205–2000. Hearing impaired
individuals are advised that information
pmangrum on DSK3VPTVN1PROD with NOTICES
ADDRESSES:
VerDate Mar<15>2010
15:02 Jan 10, 2012
Jkt 226001
on this matter can be obtained by
contacting the Commission’s TDD
terminal on (202) 205–1810. Persons
with mobility impairments who will
need special assistance in gaining access
to the Commission should contact the
Office of the Secretary at (202) 205–
2000. General information concerning
the Commission may also be obtained
by accessing its internet server at
https://www.usitc.gov. The public record
for this investigation may be viewed on
the Commission’s electronic docket
(EDIS) at https://edis.usitc.gov.
FOR FURTHER INFORMATION CONTACT: The
Office of Unfair Import Investigations,
U.S. International Trade Commission,
telephone (202) 205–2560.
Authority: The authority for institution of
this investigation is contained in section 337
of the Tariff Act of 1930, as amended, and
in section 210.10 of the Commission’s Rules
of Practice and Procedure, 19 CFR 210.10
(2011).
Scope of Investigation: Having
considered the complaint, the U.S.
International Trade Commission, on
January 5, 2012, ordered that—
(1) Pursuant to subsection (b) of
section 337 of the Tariff Act of 1930, as
amended, an investigation be instituted
to determine whether there is a
violation of subsection (a)(1)(B) of
section 337 in the importation into the
United States, the sale for importation,
or the sale within the United States after
importation of certain Blu-ray disc
players, components thereof and
products containing same that infringe
one or more of claims 7, 8, 10, 12, 14,
and 15 of the ‘505 patent, and whether
an industry in the United States exists
as required by subsection (a)(2) of
section 337;
(2) For the purpose of the
investigation so instituted, the following
are hereby named as parties upon which
this notice of investigation shall be
served:
(a) The complainant is:
Walker Digital, LLC, 2 High Ridge
Park, Stamford, CT 06905.
(b) The respondents are the following
entities alleged to be in violation of
section 337, and are the parties upon
which the complaint is to be served:
D&M Holdings, Inc., D&M Building 2–
1, Nisshin-cho, Kawasaki-ku, Kawasakishi, Kanagawa 210–8569, Japan.
D&M Holdings US, Inc., 100
Corporate Drive, Mahwah, NJ 07430.
Denon Electronics (USA) LLC, 100
Corporate Drive, Mahwah, NJ 07430.
Funai Electric Co., Ltd., 7–7–1
Nakagaito, Daito City, Osaka 574–0013,
Japan.
Funai Corporation, Inc., 201 Route 17
North, Suite 903, Rutherford, NJ 07070.
PO 00000
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1725
Haier Group Corporation, 1 Haier
Road, Hi-Tech Zone, Qindao 266101,
China.
Haier America Trading, LLC, 1356
Broadway, New York, NY 10018.
Harman International Industries, Inc.,
400 Atlantic Street, 15th Floor,
Stamford, CT 06901.
Inkel Corporation, 3–8, CheongcheonDong, Bupyeong-Gu, Incheon, 4.3–853,
South Korea.
LG Electronics, Inc., LG Twin Towers,
20 Yeouido-dong, Yeongdeungpo-gu,
Seoul 150–721, South Korea.
LG Electronics U.S.A., Inc., 1000
Sylvan Avenue, Englewood Cliffs, NJ
07632.
Marantz America LLC, 100 Corporate
Drive, Mahwah, NJ 07430.
Onkyo Sound & Vision Corporation,
2–1 Nisshin-cho, Neyagawa-shi, Osaka
572–8540, Japan.
Onkyo USA Corporation, 18 Park
Way, Upper Saddle River, NJ 07458.
Orion America, Inc., 1150 S. Main
Street, Princeton, IN 47670.
Orion Electric Co., Ltd., 41–1 Iehisacho, Echizen-shi, Fukui 915–8555,
Japan.
Panasonic Corporation, 1006 Oaza
Kodoma, Kadoma-shi, Osaka 571–8501,
Japan.
Panasonic Corporation of North
America, One Panasonic Way,
Seacaucus, NJ 07094.
P&F USA, Inc., 3015 Windward Plaza,
Suite 100, Alpharetta, GA 30005.
Philips Electronics North America
Corp., 3000 Minuteman Road, Andover,
Massachusetts 01810.
Pioneer Corporation, 1–1 Shin-ogura,
Saiwai-ku, Kawasaki-shi, Kanagawa
212–0031, Japan.
Pioneer Electronics (USA) Inc., 1925
East Dominguez Street, Long Beach, CA
90810.
Samsung Electronics Co., Ltd., 1320–
10, Seocho 2-dong, Seocho-gu, Seoul
137–857, South Korea.
Samsung Electronics America, Inc.,
105 Challenger Road, Ridgefield Park,
NJ 07660.
Sharp Corporation, 22–22 Nagaikecho, Abeno-ku, Osaka 545–8522, Japan.
Sharp Electronics Corporation, 1
Sharp Plaza, Mahwah, NJ 07495.
Sherwood America, Inc., 14730 Beach
Boulevard, #102, La Mirada, CA 90638.
Sony Corporation, 1–7–1 Konan,
Minato-ku, Tokyo 108–0075, Japan.
Sony Computer Entertainment, Inc.,
1–7–1 Konan, Minato-ku, Tokyo 108–
0075, Japan.
Sony Corporation of America, 1550
Madison Avenue, New York, NY 10022.
Sony Electronics, Inc., 6530 Via
Esprillo, San Diego, CA 92127.
Sony Computer Entertainment,
America LLC, 919 East Hillsdale
Boulevard, Foster City, CA 94404.
E:\FR\FM\11JAN1.SGM
11JAN1
]]>Agencies
[Federal Register Volume 77, Number 7 (Wednesday, January 11, 2012)]
[Notices]
[Pages 1723-1725]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2012-279]
-----------------------------------------------------------------------
DEPARTMENT OF THE INTERIOR
National Park Service
Proposed Concession Contract for Shenandoah National Park--
Alternative Formula for Calculating Leasehold Surrender Interest
AGENCY: National Park Service, Interior.
ACTION: Notice.
-----------------------------------------------------------------------
SUMMARY: The National Park Service invites public comments on a
proposed alternative formula for the value of leasehold surrender
interest to be included in its proposed ten-year concession contract
for Shenandoah National Park. The contract will cover operation of the
lodging, food and beverage, retail sales, gasoline, and horseback
riding operations at the Park.
DATES: Public comments will be accepted on or before February 10, 2012.
ADDRESSES: Send comments to Ms. Jo A. Pendry, Chief, Commercial
Services Program, National Park Service, 1201 Eye Street NW., 11th
Floor, Washington, DC 20005 or via email at jo_pendry@nps.gov or via
fax at (202) 371-2090.
FOR FURTHER INFORMATION CONTACT: Jo A. Pendry, (202) 513-7156.
SUPPLEMENTARY INFORMATION:
The National Park Service will be soliciting proposals for
operation of the lodging, food and beverage, retail sales, gasoline,
and horseback riding operations at Shenandoah National Park in 2012.
The new contract is intended to be for a term of 10 years and will
include an alternative formula for calculating leaseholder surrender
interest. In this notice, we are soliciting comments on our use of this
alternative formula. While we aren't required by law to solicit
comments on this alternative formula, we are providing an opportunity
for public comment because this is only the second time that we have
proposed using an alternative LSI formula.
Leasehold surrender interest (LSI) is the interest in real property
improvements that a concessioner provides under an NPS concession
contract. Public Law 105-391 of 1998 (the 1998 Act) established the
standard LSI valuation formula. The formula is generally as follows:
The initial construction cost of the related capital
improvement.
adjusted by the percentage increase or decrease in the
Consumer Price Index (CPI).
less physical depreciation of the related capital
improvement.
The 1998 Act also allows alternative LSI-value formulas for contracts
with an LSI value over $10 million. Because the new contract for
Shenandoah National Park will exceed $10 million, we are proposing to
use an alternative LSI formula. Under our proposed alternative formula,
the LSI value of all eligible capital improvements will be depreciated
annually, in equal portions, on a forty (40) year, straight-line basis
during the contract's 10-year term.
We Have Made Two Determinations
We have determined, subject to consideration of public comments,
that:
The proposed alternative LSI formula, in comparison to the
standard LSI formula, is necessary to provide a fair return to the
Government and to foster competition for the new contract by providing
a reasonable opportunity for profit to the new concessioner.
[[Page 1724]]
The proposed alternative LSI formula is consistent with
the objectives of the 1998 Act, particularly, as discussed below, with
respect to the fair return it will provide to the Government and the
new concessioner and the enhanced competition it will foster.
The 1998 Act does not require these determinations and this Federal
Register notice for alternative LSI formulas (such as the one we
propose) that are based on annual straight line depreciation of the
initial value as provided under 1998 Federal income tax laws and
regulations. However, because this is only the second time that we have
proposed using an alternative LSI formula, we have made these
determinations and are publishing this notice to solicit public
comment.
If we adopt the alternative LSI formula, it will apply only to the
new contract, SHEN001-13. We have made no decision to apply the
proposed LSI formula or any other LSI alternative to future concession
contracts. If we consider using an alternative LSI formula for any
other contracts, we will ask for public comments if required or
appropriate.
First Determination: Fair Return to the Government
We have determined, subject to consideration of public comments,
that the proposed alternative LSI formula is necessary to provide a
fair return to the Government, as well as helping to provide a fair
return to the new concessioner.
We consider that ``fair return'' to the Government includes the
requirement of the 1998 Act that we include in concession contracts a
franchise fee payable to the Government that is based upon
consideration of the probable value to the concessioner of the
privileges granted by the contract. However, under the standard LSI
formula, the amount of money that we would pay (directly or indirectly)
for LSI as of the expiration of the new contract is inevitably
speculative as of the time of contract solicitation, contract award,
and during the contract term. This is because we and prospective
concessioners must estimate in advance the future CPI rate, the amount
of depreciation that will occur over the term of the contract, and the
cost to cure the depreciation.
Thus, if we use the standard LSI formula to establish the required
minimum franchise fee for the new contract, that fee will reflect
speculative estimates of CPI and depreciation rates over the term of
the contract. Likewise, when a prospective concessioner offers to meet
or exceed the minimum franchise fee that we would establish under the
standard LSI formula, this business decision relies on speculative
estimates of future CPI and depreciation rates. A more dependable LSI
value will allow us to better project the long-term cost of the
concessioner's investment and to calculate a franchise fee that
provides a fair return.
For these reasons, we consider it necessary to include the proposed
alternative LSI formula in the new contract in order to provide a fair
return to the Government.
Second Determination: Fostering Competition
Elimination of the speculative nature of LSI value by using the
proposed LSI formula is also considered necessary to foster competition
for the new contract by providing a reasonable opportunity for the
concessioner to make a profit under the new contract. This is because
prospective concessioners will know with a high degree of certainty
(subject only to estimates of the value of any new capital improvements
constructed or installed during the term of the contract) how much
money they will be paid for initial LSI upon the expiration of the new
contract. The proposed LSI formula eliminates speculation regarding CPI
and depreciation required under the standard LSI formula. The resulting
lower risk and greater certainty in the business opportunity provides
the concessioner reasonable opportunity for profit under the terms of
the new contract. It should also encourage businesses to apply for the
new contract, thereby fostering competition.
Private firms not familiar with the NPS concession program have
indicated that the complexities and uncertainty of the standard LSI
formula have deterred them from submitting offers for concessions. We
believe that using the proposed alternative LSI formula in the new
contract will foster competition by providing interested entities with
a reasonable opportunity for profit that, with respect to LSI, is
assured, understandable, and more comparable to practices in the
private sector.
In addition, the estimated lower LSI payment under the alternative
formula (as opposed to a higher estimated value provided by the
standard LSI formula) allows us to charge a lower minimum franchise
fee. This will ensure the concessioner greater cash flows during the
term of the contract, in contrast to the standard LSI formula's higher
(and uncertain) LSI payment at the expiration of the contract. Since
many prospective concessioners will likely prefer the higher cash flows
throughout the contract term under the proposed LSI formula, the
alternative formula should foster competition for the new contract.
The proposed LSI formula will also enhance competition for the
concession contract that will succeed the new contract. This is because
the final value of the contract's LSI should be significantly lower
than it would be under the standard LSI formula, thereby lowering the
amount of LSI purchase money needed by a prospective new concessioner.
This lower entry cost should encourage competitive proposals from
prospective concessioners.
The proposed LSI formula should not materially affect the new
concessioner's projected rate of return under the new contract. This is
because, in developing the new contract's minimum franchise fee, we
assessed projected revenues and expenses and used industry standards to
estimate a fair return to the new concessioner. This estimate includes
the cost of acquiring existing LSI.
The new contract's minimum franchise fee thus reflects the
financial consequences of the proposed LSI formula. This means that the
estimated fair return to the new concessioner would be approximately
the same whether the new contract included the standard LSI formula or
the proposed LSI formula (taking into account the time value of money).
The proposed LSI formula will not materially change the projected fair
return to the new concessioner, but will reduce the speculative nature
of LSI value under the standard formula. With respect to the rate of
return, the impact of the use of the proposed LSI formula is neutral,
but not adverse, to the requirement of fostering competition.
Public Availability of Further Information
Complete details and further explanation of the proposed LSI
formula will be in the proposed prospectus for the new contract that is
publically available at https://www.nps.gov/commercialservices. In the
interest of time, we may issue a prospectus for the new contract in
FedBizOpp.gov that incorporates the proposed LSI formula. If
consideration of public comments in response to this notice causes us
to alter the proposed alternative LSI formula, we will amend the
prospectus accordingly (through publication in FedBizOpp.gov) before
the deadline for submission of proposals.
We invite your comments and will consider all comments that we
receive by the deadline in the DATES section of this notice.
Before including your address, phone number, email address, or
other identifying information in your
[[Page 1725]]
comment, you should be aware that your entire comment--including your
personal identifying information--may be made publicly available at any
time. While you can ask us in your comment to withhold your personal
identifying information from public review, we cannot guarantee that we
will be able to do so.
Peggy O'Dell,
Deputy Director, Operations.
[FR Doc. 2012-279 Filed 1-10-12; 8:45 am]
BILLING CODE P
