Commercial Visitor Services; Concession Contracts, 90098-90120 [2023-28659]

Agencies

• DEPARTMENT OF THE INTERIOR
• National Park Service

[Federal Register Volume 88, Number 249 (Friday, December 29, 2023)]
[Rules and Regulations]
[Pages 90098-90120]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-28659]


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DEPARTMENT OF THE INTERIOR

National Park Service

36 CFR Part 51

[NPS-WASO- 36913; PPWOBSADC0; PPMVSCS1Y.Y00000]
RIN 1024-AE57


Commercial Visitor Services; Concession Contracts

AGENCY: National Park Service, Interior.

ACTION: Final rule.

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SUMMARY: The National Park Service revises regulations that govern the 
solicitation, award, and administration of concession contracts to 
provide commercial visitor services at National Park System units under 
the authority granted through the Concessions Management Improvement 
Act of 1998 and the National Park Service Centennial Act. The changes 
reduce administrative burdens and expand sustainable, high quality, and 
contemporary concessioner-provided visitor services in national parks.

DATES: This rule is effective January 29, 2024.

ADDRESSES: The comments received on the proposed rule and an economic 
analysis are available on https://www.regulations.gov in Docket ID: 
NPS-2020-0003.

FOR FURTHER INFORMATION CONTACT: Kurt Rausch, Chief of Commercial 
Services Program, National Park Service; (202) 513-7202; 
[email protected].

SUPPLEMENTARY INFORMATION:

Background

Authority and Purpose

    The National Park Service (NPS) enters into contracts with 
concessioners to provide commercial visitor services in over 100 units 
of the National Park System. Examples of such services include lodging, 
food, retail, marinas, transportation, and guided recreation. Each 
year, concession contracts generate approximately $1.5 billion in gross 
revenues and return approximately $135 million in franchise fees to the 
NPS. The National Park Service Concession Policies Act of 1965 (1965 
Act) (Pub. L. 89-249) provided the first statutory authority for the 
NPS to issue concession contracts. Since the repeal of the 1965 Act, 
concession contracts have been awarded under the Concessions Management 
Improvement Act of 1998 (1998 Act), 54 U.S.C. 101901-101926. A revision 
to the 1998 Act was also included in section 502 of the 2016 National 
Park Service Centennial Act (Centennial Act) (Pub. L. 114-289). NPS 
regulations in 36 CFR part 51 govern the solicitation and award of 
concession contracts issued under the 1998 Act and the administration 
of concession contracts issued under the 1965 and 1998 Acts. The NPS 
promulgated these regulations in April 2000 (65 FR 20630) and since 
that time has made only minor changes to them (see, e.g., 79 FR 58261).
    In August of 2018, as part of the Department of the Interior's 
implementation of Executive Order 13777, Enforcing the Regulatory 
Reform Agenda, and in response to a request for public input on how the 
Department of the Interior can improve implementation of regulatory 
reform initiatives by identifying regulations for modification (82 FR 
28429), the NPS's external concessions partners provided the Secretary 
of the Interior (Secretary) with suggestions for improving existing 
concession regulations. The Department of the Interior considered the 
suggestions provided by the concessions partners, and those suggestions 
are reflected in this rule. In addition, Secretary's Order 3366, 
Increasing Recreational Opportunities on Lands and Waters Managed by 
the U.S.

[[Page 90099]]

Department of the Interior, signed by the Secretary in April of 2018, 
directed the NPS to look for ways to streamline and improve the 
contracting process for recreational concessioners as part of the 
Department's efforts to expand access to and improve the infrastructure 
on public lands and waters, including through the use of public-private 
partnerships. The directives set forth in that Secretary's Order are 
intended to provide the public with more recreational opportunities and 
memorable experiences on the Department's public lands and waters. This 
rule is responsive to these directives, suggestions received, and areas 
for improvement identified by the NPS. Finally, the NPS received a 
variety of comments on the proposed revisions to the rule during the 
public comment period including suggestions for additional improvements 
to the rule. The NPS considered these comments and has incorporated 
some of the suggestions in this final rule.
    Each of the changes to 36 CFR part 51 is explained below and 
corresponds to the subparts of the existing regulations that are 
amended under this rule. In total, this final rule makes 12 changes to 
the existing regulations, which are numbered to assist with ease of 
reading. Some of the changes are implemented for new contracts, while 
others are effective for both current and new contracts as identified 
in the explanation for each change. The overall purpose of these 
changes is to update and improve the regulations governing concession 
contracts so that the public is better served when visiting our 
nation's most cherished public lands and waters.

Subpart C--Solicitation, Selection, and Award Procedures (36 CFR 51.4-
51.22)

    The regulations in Subpart C set forth the processes and rules 
governing the solicitation, selection, and award of concession 
contracts. The NPS makes four changes to this subpart, as explained 
below.

Change 1: New Concession Opportunities

    The NPS recognizes that the needs for commercial visitor services 
in parks may change over time, including the need to provide new 
services that are not currently provided. Recent examples include 
wireless connectivity services at Lake Mead National Recreation Area, 
parking management at Muir Woods National Monument, and bike rentals at 
Grand Canyon National Park. The NPS considers evolving visitor needs 
through its commercial services planning processes. Each unit of the 
national park system is required to have a park foundation document, 
that provides basic guidance for all planning and management decisions 
and from which the NPS develops a park's planning portfolio. The 
planning portfolio is the assemblage of individual plans, studies, and 
inventories that guide park decision-making. For commercial services, 
these may range from broader planning efforts such as visitor use 
studies and commercial services strategies to more focused studies such 
as climbing or horse management plans. Commercial visitor services 
planning also occurs through the concession contract prospectus 
development process. During this process, the NPS reviews the services 
currently provided, conducts market studies, and may solicit public 
comments to assess new commercial visitor service opportunities.
    The final rule recognizes this planning framework by requiring the 
solicitation and consideration of suggestions for new concession 
opportunities. Section 51.4(c) states that the Director will issue a 
prospectus for a new concession opportunity when the Director 
determines that a new concession opportunity is necessary and 
appropriate for public use and enjoyment of the park area and is 
consistent to the highest practicable degree with the preservation and 
conservation of the resources and values of the park area. This 
standard for evaluating new opportunities is consistent with the 1998 
Act. 54 U.S.C. 101912(b)(1)-(2). Section 51.4(d) requires the Director 
to establish procedures to annually solicit and consider suggestions 
from the public for new commercial services in NPS units. While the 
regulation does not specify the procedures for the solicitation, the 
regulation does require the Director to make all proposals and the 
Director's evaluation of them public.\1\ Section 51.4(e) establishes 
relevant factors that the Director will consider when deciding whether 
to issue a prospectus for a new concession opportunity in addition to 
the determination that a commercial visitor service is necessary and 
appropriate for public use and enjoyment of the park area and is 
consistent to the highest practicable degree with the preservation and 
conservation of the resources and values of the park area. These 
factors shall include whether the suggested concession opportunities 
are already adequately provided within the unit; the potential for 
augmented resources for park area operations; the effects of the 
suggested concession operations on the park area; the sustainability of 
the suggested concession opportunities; the innovative quality of the 
suggestions; and the potential impacts on park area visitation and on 
communities located near the park area. Paragraph (f) clarifies that 
the NPS may not, during the competitive evaluation process, give 
preference to any party that suggests an opportunity that is 
subsequently offered by the NPS simply because the party originally 
suggested the idea. The 1998 Act recognizes only two categories of 
concession contracts that provide preferential rights to incumbent 
concessioners. 54 U.S.C. 101913(7), (8). The final rule recognizes, 
however, that in some circumstances the Director may award a contract 
without competition under 36 CFR 51.25. Section 51.4(g) provides the 
Director discretion to amend an existing contract to allow a 
concessioner to provide new or additional services under 36 CFR 51.76. 
This preserves the authority of the Director to adjust the services 
being provided in response to changing visitor needs over the term of 
the contract, consistent with the fundamental business opportunity that 
was offered in the concession prospectus. Paragraph (h) states that 
nothing in the new processes to be established by the Director would 
limit the Director from soliciting, considering, or collecting 
information related to new concession opportunities.
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    \1\ The NPS will specify solicitation procedures in policy and 
in instructions that will be posted on public-facing websites, such 
as the website for the NPS Commercial Services Program (https://www.nps.gov/orgs/csp/index.htm).
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Change 2: Timing of Issuing Prospectuses

    Section 51.4(b) of the existing regulations states that the 
Director will not issue a prospectus for a concession contract earlier 
than 18 months prior to the expiration of a related existing concession 
contract. The original purpose of this restriction was to ensure that 
an existing concessioner would not have to compete for a new contract 
in circumstances where assessment of the feasibility of the terms and 
conditions of the new contract would be unduly speculative (65 FR 
20637). The proposed rule would have eliminated the 18-month 
restriction for new concession contract prospectuses to allow the NPS 
the flexibility to issue a prospectus earlier in circumstances where 
there are unusually significant commitments required of potential 
offerors to acquire personal property, such as vessels, or to obtain 
financing or to manage reservations. The NPS proposed this change on 
the view that

[[Page 90100]]

this additional time would provide for more offerors, which benefits 
the NPS and the public because increased competition generally results 
in higher quality offers.
    Based on comments, however, the NPS retains the 18-month rule but 
provides an exception for when the Director determines releasing a 
prospectus earlier is necessary to provide additional time to potential 
offerors, such as when additional time is needed to avoid issuing a 
prospectus during a busy operating season or where potential offerors 
must make significant financial commitments to meet the requirements of 
the contract. Such additional time must be as short as prudent.

Change 3: Publishing Notice of a Prospectus

    Section 51.8 of the existing regulations states that the Director 
will publish notice of the availability of a prospectus at least once 
in the Commerce Business Daily or in a similar publication if the 
Commerce Business Daily ceases to be published. The rule updates this 
provision to require publication in the System for Award Management 
(SAM). The rule expands the description of the types of electronic 
media that will be used to advertise opportunities to include websites 
and social media.

Change 4: Weighting Selection Factors

    The fourth change is to Sec.  51.16 of the existing regulations. 
Section 51.16 is closely related to Sec.  51.17 of the existing 
regulations, which identifies selection factors that must be applied by 
the Director when assessing the merits of a proposal. Section 51.17(a) 
lists five primary selection factors:
    Principal selection factor 1: The responsiveness of the proposal to 
the objectives, as described in the prospectus, of protecting, 
conserving, and preserving resources of the park area.
    Principal selection factor 2: The responsiveness of the proposal to 
the objectives, as described in the prospectus, of providing necessary 
and appropriate visitor services at reasonable rates.
    Principal selection factor 3: The experience and related background 
of the offeror, including the past performance and expertise of the 
offeror in providing the same or similar visitor services as those to 
be provided under the concession contract.
    Principal selection factor 4: The financial capability of the 
offeror to carry out its proposal.
    Principal selection factor 5: The amount of the proposed minimum 
franchise fee, if any, and/or other forms of financial consideration to 
the Director.
    The Director must consider these five factors under the 1998 Act. 
54 U.S.C. 101913(5)(A).
    Section 51.17(b) identifies one secondary selection factor 
(secondary selection factor 1) and allows the Director to use 
additional secondary selection factors where appropriate and otherwise 
permitted by law. Secondary selection factor 1 is the quality of the 
offeror's proposal to conduct its operations in a manner that furthers 
the protection, conservation and preservation of park area and other 
resources through environmental management programs and activities, 
including, without limitation, energy conservation, waste reduction, 
and recycling. The NPS may exclude this factor for small contracts and 
those expected to have limited impacts on park resources. Secondary 
selection factors are permitted, but not required, to be considered 
under the 1998 Act. 54 U.S.C. 101913(5)(B). Although the 1998 Act is 
silent on how the Director should weigh each factor, Sec.  51.16 
requires the Director to assign a score for each selection factor that 
reflects the merits of the proposal compared to other proposals 
received, if any.
    The final rule retains the relative scoring relationships of the 
2000 rule but provides additional flexibility for the NPS by increasing 
the possible number of total points from 30 to 40. The final rule also 
requires that each selection factor used must provide for a maximum 
score of at least one point. Further, the final rule provides that 
secondary selection factor 1 must have a maximum score less than the 
maximum score for the principal selection factor for franchise fees and 
the aggregate score of all other secondary selection factors must have 
a maximum score less than the maximum score for the principal selection 
factor for franchise fees. The final rule also assigns a score of one 
point for agreeing to the prospectus franchise fee (as defined in Sec.  
51.78) or, when the Director determines use of the prospectus franchise 
fee inappropriate, the minimum acceptable franchise fee set forth in 
the prospectus. The proposed rule did not specify minimum or maximum 
points for selection factors and provided that the principal selection 
factor for franchise fees could have the same possible score as the 
other principal selection factors. The revisions to Sec.  51.16 will 
apply to all prospectuses issued after the effective date of the final 
rule and will provide the NPS with greater flexibility to weigh the 
factors according to how important they are to the NPS and for the 
specific contract.

Change 5: Adding Secondary Selection Factor for Consideration of New 
Services

    The final rule features the benefit of providing new commercial 
visitor services. For several years, the NPS occasionally has included 
a secondary selection factor asking offerors to identify ways they 
could add additional services and programs within the scope of the 
subject contract. The NPS has revised Sec.  51.17(b)(2) specifically to 
provide that the Director will include such a secondary selection 
factor when appropriate. This revision will apply to all prospectuses 
issued after the effective date of the final rule.

Subpart G--Leasehold Surrender Interest (36 CFR 51.51-51.67)

    The regulations in Subpart G explain how a concessioner can obtain 
leasehold surrender interest (LSI) in capital improvements to visitor 
service facilities that are made under the terms of a concession 
contract. The NPS makes one change to this subpart, as explained below 
under Change 6. This change applies to future concession contracts.
    The NPS manages concession contracts to ensure concessioners 
maintain and repair the facilities assigned as required under the terms 
of their contract. The NPS also seeks to encourage concessioners to 
make capital improvements in order to ensure facilities are 
structurally sound, updated, and adequate to meet the needs of the 
visiting public. When the NPS approves the concessioner to fund and 
construct capital improvements to expand, update, and rehabilitate 
facilities, the concessioner receives LSI for the associated costs in 
each capital improvement. The NPS considers the costs associated with 
these improvements, as well as the opportunity for receiving LSI, when 
it determines the concessioner's reasonable opportunity for net profit 
and sets the prospectus or minimum franchise fee for the contract. The 
1998 Act outlines, in general terms, what constitutes a capital 
improvement eligible for LSI and how to value LSI. 54 U.S.C. 101915. 
Details about which types of construction activities are eligible for 
LSI and how it is valued are found in subpart G.
    LSI is unique to NPS concession contracts and is not used in the 
private sector. In the private sector, an owner

[[Page 90101]]

bears the risk of changes when an asset increases or decreases in 
value. The owner may realize a return on its investment for capital 
improvements when it sells an improved property, if the value has 
appreciated, or lose money if the value has declined. In contrast, 
under concession contracts with the NPS, the concessioner invests in 
facilities they do not own. As a result, since the concessioner cannot 
receive a return on the investment through a sale of the property, LSI 
provides them that opportunity in the form of a guaranteed return to 
the concessioner of its investment.
    Although the NPS seeks to encourage concessioners to make capital 
investments, it must balance the benefits of such investments with the 
need to address the LSI generated from such investments. If the 
incumbent concessioner wins the new contract, the concessioner retains 
the LSI value, which continues through the term of the next contract. 
If there is a new concessioner, the LSI is often transferred to a new 
concessioner by the new concessioner compensating the outgoing 
concessioner for the value of the LSI. This can create a significant 
investment hurdle that limits competition on the contract. A higher 
initial investment can lead to reduced competition because fewer 
entities have access to the large buy-in amounts for certain contracts 
or because the return on their investment is not as attractive as other 
opportunities. When there is the likelihood of less competition, the 
incumbent also may not be incentivized to offer as many new 
enhancements when providing the services required, which can lessen the 
visitor experience. If, instead, the NPS pays the value of the LSI to 
the outgoing concessioner, the funds expended are unavailable to 
support other NPS needs, such as prospectus development or managing the 
new concessioner during the term of the contract and improving visitor 
operations and facilities.

Change 6: Definition of Major Rehabilitation

    Section 51.51 defines terms used in subpart G to explain how LSI is 
applied.
    The NPS revises the definition of ``major rehabilitation'' in order 
to simplify and more appropriately characterize what qualifies as a 
major rehabilitation with the intent of encouraging investment in 
commercial visitor service capital improvements by concessioners. These 
changes apply for future concession contracts.
    First, the NPS simplifies the definition of a major rehabilitation 
by removing the term ``comprehensive'' because it is vague and suggests 
a limitation on investments that is not intended to be included in the 
concept of a planned ``major'' rehabilitation as defined in the 
regulation.
    Second, the NPS removes the term ``that the director approves in 
advance'' as Sec.  51.54 already requires such approval for any capital 
improvement, including major rehabilitations.
    Third, the NPS removes the requirement that, unless special 
circumstances exist, the Director must determine the rehabilitation 
project is completed within 18 months from the start of the 
rehabilitation work. Projects must be approved by the Director and any 
approval would include a project schedule. Eighteen months is a 
timeframe typical for such projects. In practice, however, the Director 
approves the timeline for major rehabilitation projects based on the 
complexity and scope of the project. The result is that the 18-month 
requirement in the existing regulation has been rendered superfluous 
and does not provide any benefit to the public. Removing this 
requirement simplifies and clarifies the definition to match existing 
practice.
    Fourth, the NPS decreases the construction cost threshold for what 
constitutes major rehabilitation from 50% of the pre-rehabilitation 
value to 30% of the pre-rehabilitation value. This allows for a broader 
range of major commercial visitor service capital improvement 
construction projects to qualify for increased LSI under Sec.  51.64 or 
new LSI under Sec.  51.66.
    The NPS selected the 30% threshold through industry research. The 
International Facility Management Association identifies 30% as the 
threshold for when a rehabilitation is ``critical'' to the structure. 
The NPS believes the 30% threshold better aligns with this industry 
standard than does the 50% threshold in the existing definition. 
Further, the NPS believes that broadening the situations in which the 
Director may approve the availability of LSI will facilitate important 
and needed capital improvement projects that will improve the 
conditions of facilities and help ensure a safe and enjoyable 
experience for park visitors.
    While the 1998 Act intended to promote private investment in 
concession structures by providing LSI to concessioners, the 50% 
threshold contained in the existing regulations has limited the 
Director's ability to allow concessioners' opportunities to make 
investments of the type envisioned by Congress. Concerns have been 
raised that the current regulations actually discourage investment in 
concessions structures. The NPS seeks to improve the regulations to 
encourage concessioners to invest in capital improvements.
    Broadening the scope of projects that can be supported by the 
availability of LSI will have other consequences to the concession 
contract and its management. For example, the utilization of LSI for 
rehabilitation projects allows for the recovery of investment by the 
concessioner where insufficient remaining contract term could make the 
investment financially imprudent without LSI lowering the risk of that 
investment. This lower risk associated with the ability of a 
concessioner to incur LSI will be considered in the NPS analysis of the 
opportunity and may result in a higher franchise fee set in the 
prospectus consistent with the statutory requirements to set a fee 
appropriate to the probable value of the contract and thus possibly 
result in a higher franchise fee paid to the government. Franchise fee 
revenue may also increase if increased concessioner investment in 
higher quality facilities results in increased visitor demand for NPS 
concessions. The NPS could use the new fee revenue for other NPS needs 
or when appropriate to buy down LSI incurred on the contract as a 
result of the concessioner investment. This assumes that revenue 
projections for the contract are realized and adequate franchise fees 
are available, since franchise fees are calculated as a function of 
revenue. The use of franchise fees for this purpose will be balanced 
against the use of these funds for other NPS needs in light of all 
funding sources. An analysis of the expected relationship between LSI 
and franchise fees as a result of this change can be found in the 
report entitled ``36 CFR [part] 51 Concessions Contract Revisions 
Regulatory Impact Analysis (RIA) and Initial Regulatory Flexibility 
Analysis (IRFA)'' that can be accessed at https://www.regulations.gov 
in Docket ID: NPS-2020-0003.
    Fifth, the NPS added to the definition of a major rehabilitation, 
that it must improve visitor health, safety, and enjoyment or the 
health and safety of concessioner employees and will either enhance the 
property's overall value, prolong its useful life, or adapt it to new 
uses. This adopts a common industry definition for the scope of capital 
investment to aid concessioners in understanding the scope of LSI-
eligible projects.
    The changes to the definition of ``major rehabilitation'' do not 
negate the requirement that the Director must approve in advance any 
major

[[Page 90102]]

rehabilitation project in accordance with Sec.  51.54. Although the 
changes to the definition will likely increase the opportunities for 
concessioners to seek approval for major rehabilitation projects, the 
NPS considers many factors when deciding whether to approve a capital 
investment. For example, the NPS may decide that the value of LSI that 
would result from the capital improvement would decrease competition 
for future contracts, outweighing the benefit of the improvement. As a 
result, the availability of LSI may not generate the desired outcome of 
increased investment in all cases. However, in these cases the NPS may 
pay for the capital improvements itself to avoid generating imprudent 
levels of LSI. The NPS would need to evaluate the benefits of the 
investment against the opportunity costs of diverting funds from other 
projects, and how that would impact the quality of other concession 
facilities and visitor services.

Subpart I--Concession Contract Provisions (36 CFR 51.73-51.83)

    The regulations in subpart I govern key provisions in concession 
contracts. The NPS makes six changes to this subpart, as explained 
below.

Change 7: Term of Concession Contracts

    Section 51.73 of the existing regulations governs the length of 
concession contracts and contained a phrase not required by the statute 
that concessioner contracts should be as short as is prudent 
considering certain factors. The final rule deletes the reference to 
``as short as is prudent'' to better align Sec.  51.73(a) with the 
provisions of the 1998 Act (54 U.S.C. 101914). The final rule states 
that contracts may not exceed 20 years in length and generally will be 
awarded for ten years or less, unless the Director determines that the 
contract terms and conditions, including the required construction of 
capital improvements, warrant a longer term. The regulations also say 
that it is the policy of the Director that the terms should account for 
the financial requirements of the concession contract, resource 
protection, and visitor needs, and other factors the Director may deem 
appropriate.
    The NPS also revises Sec.  51.73 to allow the Director to include 
contract provisions allowing for an optional term or terms of one year 
or more (but not to exceed three years in total), provided that the 
total term of the contract, including all optional terms, does not 
exceed 20 years. As proposed, the concessioner would need to meet the 
performance criteria described in the contract. In the final rule, the 
NPS states the subject contract will set out the evaluation rating 
requirements and other performance criteria rather than regulating the 
rating standard. The final rule also provides that the concessioner may 
exercise the option(s) only if the Director has determined the 
concessioner has met the performance criteria. This change applies to 
future contracts only.
    The final rule has a separate provision allowing the Director and 
concessioner to agree to amend a contract to lengthen the original term 
of a contract when the Director determines there has been a substantial 
interruption of or change to operations due to natural events or other 
reasons outside the control of the concessioner. These substantial 
interruptions could include, for example, cessation of operations due 
to extended fire season, severe hurricane damage, or lengthy 
administrative closures ordered by the government. This change allows 
the NPS and the concessioners a better opportunity to receive the 
benefits that both anticipated during the solicitation process and upon 
execution of the contract. This change applies to current concession 
contracts still within the original term of the contract as well as 
future contracts; it does not apply when the concessioner is operating 
under either a temporary concession contract or an extension of an 
existing concession contract awarded pursuant to subpart D of this 
part, as the NPS may only award a temporary contract or a contract 
extension ``for a term not to exceed 3 years,'' and only ``[t]o avoid 
interruption of services to the public[.]'' 54 U.S.C. 101913(11)(A). 
The NPS expects that this change will increase competition for 
contracts and avoid situations where concessioners reduce services, 
facility management, or other aspects of their contracted requirements 
to cover lost revenue.

Change 8: New or Additional Services

    The Centennial Act revised 54 U.S.C. 101913(9) to allow the NPS to 
amend an existing contract to provide new and additional services that 
do not represent a material change to the required and authorized 
services under the contract. This language may provide new 
opportunities to enhance commercial services under existing contracts 
allowing concessioners to meet changing visitor needs where 
appropriate. Before the Director authorizes such new or additional 
services under a contract, the rule will continue to require the 
Director to determine that the services are necessary and appropriate 
for public use and enjoyment of the NPS unit where they will be 
provided and are consistent to the highest practicable degree with the 
preservation and conservation of the resources and values of that unit 
in accordance with the Centennial Act and the 1998 Act. 54 U.S.C. 
101912(b) and 10913(9).
    The final rule also regulates the administrative practice of 
allowing minor changes to the scope of existing services (such as 
extending operating hours) as part of the revisions to this section.
    The proposed rule would have retained a provision that prohibited 
the Director from including a provision in a concession contract that 
would grant a concessioner a preferential right to provide new or 
additional visitor services under the terms of a concession contract 
(defined as a right of a concessioner to a preference in the nature of 
a right of first refusal). The Centennial Act replaced the statutory 
basis for this regulatory prohibition, so the NPS excludes it from the 
final rule.
    This change applies to current and future concession contracts.

Change 9: Setting Franchise Fees

    Section 51.78 reflects the requirement of the 1998 Act that 
concession contracts provide for payment to the government of a 
franchise fee in consideration of the probable value to the 
concessioner of the privileges granted by the contract. The regulations 
describe how probable value will be determined and how the fee may be 
adjusted during the term of the contract. The final rule modifies Sec.  
51.78 in several ways to clarify how the NPS will set the franchise fee 
to encourage competition and provide enhanced or higher quality service 
offerings while considering the reasonable opportunity for net profit 
in relation to capital invested and the obligations of the contract.
    First, the NPS modifies language in Sec.  51.78(a) to clarify that 
the consideration in the capital invested to determine reasonable 
opportunity for net profit includes those funds required to be placed 
in special accounts identified in Sec.  51.81, and the obligations of 
the contract as described in the prospectus.
    Second, the NPS provides a new subsection (b) providing alternative 
methods for the Director to determine the type of franchise fee to 
include in a prospectus. Congress has charged the NPS with ensuring 
that the franchise fee reflects ``the probable value to the 
concessioner of the privileges granted by the particular contract 
involved,'' 54

[[Page 90103]]

U.S.C. 101917(a). Historically, the NPS implemented this statutory 
directive by setting a minimum acceptable franchise fee in the 
prospectus and allowing competition to determine whether a higher 
franchise fee better reflects the contract's probable value to the 
offeror in consideration of the capital invested and obligations of the 
contract including any enhancements in visitor services that might be 
offered. In the final rule, the NPS has included an additional means of 
meeting the statutory directive by using a ``prospectus franchise 
fee,'' which will be set at a level to encourage competition for the 
concession opportunity through offers of either higher franchise fees, 
or lower franchise fees combined with enhanced or higher quality 
service offerings that exceed the requirements included in the 
prospectus. The NPS will use the prospectus franchise fee unless such 
use is inappropriate, in which case the NPS will use the minimum 
acceptable franchise fee.
    Third, the final rule adds in a new paragraph (c) that requires 
that the Director use relevant industry data when determining the 
applicable franchise fee and to provide the basis for this 
determination in the prospectus. These additions to the regulation are 
consistent with historical NPS practice in prospectus development that 
already provides the basis for the calculation of a franchise fee based 
on the probable value of the contract to the offeror. This addition to 
the regulation will further transparency in prospectuses.
    These changes apply to all prospectuses issued after the effective 
date of the final rule. As noted, however, many of these requirements 
reflect historical NPS practice.

Change 10: Special Accounts

    Section 51.81(b) of the existing regulations allows concession 
contracts to require the concessioner to set aside a percentage of its 
gross receipts in a repair and maintenance reserve to be used, at the 
direction of the Director, solely for maintenance and repair of real 
property improvements located in park areas and utilized by the 
concessioner in its operations. Repair and maintenance reserve funds 
may not be expended to construct improvements that would be eligible 
for LSI. The proposed rule merely changed the name of the ``repair and 
maintenance reserve'' to ``component renewal reserve to reduce 
confusion about how the funds in this reserve may be used.'' The final 
rule retains that change (which applies to current, if amended, and 
future contracts) and well as the following changes that will improve 
the understanding of the reserve.
    First, the rule specifies that the NPS should identify the 
anticipated timing and estimated costs of component renewal projects in 
the prospectus. This change applies to all prospectuses issued after 
the effective date of the final rule.
    Second, to further avoid confusion, the rule describes that the 
component renewal reserve provides a mechanism for a concessioner to 
reserve monies to fund component renewal projects, and that 
concessioner obligations to maintain assigned concession facilities, 
including component renewal, are not limited to the monies in the 
component renewal reserve. This change does not change how the NPS and 
concessioners treat the component renewal reserve or the concessioners' 
maintenance obligations.

Change 11: Concessioner Rates

    Section 51.82(a) of the existing regulations states that concession 
contracts must allow concessioners to set reasonable rates and charges 
to the public for visitor services, subject to approval by the 
Director. Paragraph (b) explains how the Director will determine 
whether rates and charges are reasonable, by comparison with rates and 
charges for facilities and services of comparable character under 
similar conditions with due consideration to the following factors: 
length of season, peakloads, average percentage of occupancy, 
accessibility, availability and costs of labor and materials, and types 
of patronage. Rates and charges may not exceed market rates and charges 
for comparable facilities, goods, and services, after considering 
certain factors. These requirements are taken directly from the 1998 
Act. 54 U.S.C. 101916.
    The 1998 Act also states that the rate approval process shall be as 
prompt and as unburdensome to the concessioner as possible and rely on 
market forces to establish the reasonableness of rates and charges to 
the maximum extent practicable. 54 U.S.C. 101916(b)(1). The NPS 
finalizes several changes to Sec.  51.82 to meet these requirements. 
These changes apply to current and future concession contracts.
    First, the NPS codifies the requirements in the 1998 Act and 
provides that the NPS will rely on market forces to establish the 
reasonableness of such rates and charges to the maximum extent 
practicable.
    Second, the NPS adds a new paragraph (c) that requires the Director 
to identify the rate approval method for each category of facilities, 
goods, and services in the prospectus. Unless the Director determines 
that market forces are not sufficient to establish the reasonableness 
of rates and charges, the rule requires the Director to make a 
competitive market declaration (rather than using other NPS annual rate 
approval methods), and further provides that rates and charges will be 
approved based upon what the concessioner determines the market will 
bear. The Director will determine this by reviewing the services being 
provided by the current concessioner relative to the comparable set of 
offerings in the market. Other rate approval methods will be used only 
when the Director determines that market forces are inadequate to 
establish the reasonableness of rates and charges for the facilities, 
goods, or services. For example, this may occur for lodging or food and 
beverage outlets where there are no alternatives, guiding services for 
one-of-a-kind recreational experiences, and transportation to NPS units 
where there is only one way to access the site (e.g. ferry service to 
the Statue of Liberty). This rule requires the Director to monitor 
rates and charges and competition and allows the Director to change the 
rate approval method during the term of the contract to reflect changes 
in market conditions. This last provision allows the NPS to respond to 
market pressures on rates for concessioner services that did not 
historically exist. This has occurred where lodging and other visitor 
services have expanded in gateway communities, aided by online searches 
and booking methods that provide more options for visitors. In 
addition, competitors in some locations use dynamic pricing to set 
rates, which means that prices are adjusted to reflect demand. The task 
of approving reasonable and appropriate rates and charges in these 
scenarios is burdensome. Unlike private sector companies, concessioners 
must undergo an annual rate approval process each year where maximum 
rates are set through a complex comparability process that occurs 
months in advance of the season. The concessioners are then not as able 
to quickly and efficiently adjust rates, particularly in times when 
visitor demand is higher than was forecasted. This rule acknowledges 
this fact and allows the NPS to more fully consider competitive, 
demand-driven pricing methods where it makes sense to lessen this 
burden. The NPS monitors the rates of the concessioner. In the event 
that the concessioner's rates set based upon a competitive market 
declaration no

[[Page 90104]]

longer reflect changes in market conditions taking into account the 
varied characteristics and quality of services offered, the Director 
may determine that this rate approval method is not providing 
reasonable and appropriate rates and may change the rate approval 
method to one that will meet these conditions. The Director will 
monitor rates and charges and competition and may change the rate 
approval method during the term of the contract to reflect changes in 
market conditions.
    The enhanced use of competitive market methods may result in 
increased rates and revenue with no change in expenses to the 
concessioner. These changes in the financial opportunity of the 
contract will be accounted for through contract requirements that would 
benefit the public using the concession services. An analysis of the 
expected relationship between rates and such contract changes can be 
found by reading the report entitled ``36 CFR [part] 51 Concessions 
Contract Revisions Regulatory Impact Analysis (RIA) and Initial 
Regulatory Flexibility Analysis (IRFA)'' that can be accessed at 
https://www.regulations.gov in Docket ID: NPS-2020-0003. The NPS notes 
that the competitive market declaration and other rate methods 
establish reasonable and appropriate rates for the services that are 
being offered. This is separate than the determination of what services 
are necessary and appropriate, including the range of offerings and 
associated price points. That determination is conducted through the 
NPS planning process.
    Third, the NPS adds a new paragraph (d) that establishes rules for 
how the Director responds to requests from existing concessioners to 
change rates and charges to the public so that they are as prompt and 
as unburdensome as possible to the concessioner. The new language 
requires each contract to include a schedule for rate requests and 
describe the information necessary to include in a complete rate 
request. This clarifies a current NPS practice to include this 
information in the concession contract operating plan. The rule further 
requires, upon receipt of a request for a change in rates or charges, 
the NPS, as soon as practicable but not more than 20 days of receipt of 
the request, to provide the concessioner with a written determination 
that the request is complete, or, if not, a description of the 
information required for the request to be determined complete. Where 
changes in rates and charges have been requested and the NPS deems the 
request complete, concessioners may notify visitors making reservations 
90 or more days in advance of the anticipated rates subject to review 
and adjustment, if necessary, at or before the time of the visit 
pursuant to the NPS's timely decision to approve or reject the rate 
change. The NPS will issue a final decision approving or rejecting a 
request by a concessioner to change rates and charges to the public 
within 10 days of receipt of a complete request in accordance with the 
conditions described in the contract, except for those change requests 
requiring a full comparability study, for which the NPS will issue a 
decision as soon as possible and in no event longer than 30 days after 
receipt of the complete request. If the NPS does not approve of the 
rates and charges proposed by the concessioner, the NPS must provide in 
writing the substantive basis for any disapproval. These timeframes 
will be exceeded only in extraordinary circumstances and the 
concessioner must be notified in writing of such circumstances. If the 
NPS fails to meet the timeframes described above, and has not notified 
the concessioner in writing of the existence of extraordinary 
circumstances justifying delay, a concessioner may implement the 
requested change to rates and charges until the Director issues a final 
written decision. If the Director denies the requested change to rates 
and charges after implementation by the concessioner, the Director will 
not require the concessioner to retroactively adjust any rates or 
charges for services booked prior to the Director's denial.
    Under current policy, the NPS responds to rate requests within 45 
days, but does not have any specific timeframes as outlined in the 
revisions to the rule. The specific response requirements included in 
the final rule will improve responsiveness and provide more certainty 
to concessioners by ensuring prompt and transparent decisions regarding 
requests for rates and charges. Additionally, the advance rate 
practices described in the rule provide the concessioner flexibility so 
they are not encumbered in their ability to advertise, take 
reservations and charge reasonable and appropriate rates during the 
rate request and approval process. The NPS clarifies that charging 
advanced rates outside the rate request schedule in the contract and 
rate request and approval procedures in paragraph (c) of Sec.  51.82 
may be allowed if specified in the contract. Such allowances may occur 
when additional advanced rate practices are determined by the NPS as 
appropriate and consistent with comparable services and when they are 
conducted in accordance with NPS rate administration policy.

Change 12: Subpart J--Assignment or Encumbrance of Concession Contracts 
(36 CFR 51.84-51.97).

    The regulations in Subpart J set forth rules for executing 
assignments and encumbrances of concession contracts. The proposed rule 
included a prohibition on submitting requests to approve an assignment 
of a concession contract within twenty-four months following the 
effective date of the contract unless the proposed assignment was 
compelled by circumstances beyond the control of the assigning 
concessioner. After receiving many comments criticizing this 
prohibition as too restrictive, the NPS has decided to withdraw the 
rule change. Instead of imposing an additional restriction on the 
assignment of concession contracts, the NPS will pursue its policy 
objectives through the current regulatory framework.

Final Rule

Summary of Changes
    After internal deliberations and in response to comments, the NPS 
made the following changes to the proposed rule. For a more detailed 
discussion of these changes, refer to the next section entitled 
``Summary of Public Comments'' and bureau responses, organized by 
topic.

------------------------------------------------------------------------
           Title 36                      Description of change
------------------------------------------------------------------------
Sec.   51.4..................  How will the Director invite the general
                                public to apply for the award of a
                                concession contract and how will the
                                Director determine when to issue a
                                prospectus for a new concession
                                opportunity where no prior concession
                                services had been provided?
                                   NPS retained the 18-month
                                   rule with exceptions for issuing
                                   prospectuses earlier.
                                   NPS added a requirement for
                                   an annual process to invite ideas for
                                   new services and requires public
                                   disclosure of proposals and
                                   evaluations.
                                   NPS changed the factors
                                   considered when issuing a prospectus
                                   for new concession opportunities.
                                   NPS added a reference to the
                                   authority for noncompetitive award of
                                   concession contracts.
Sec.   51.8..................  Sec.   51.8 Where will the Director
                                publish the notice of availability of
                                the prospectus?

[[Page 90105]]

 
                                   NPS kept the language as
                                   proposed with editing improvement.
Sec.   51.16.................  How will the Director evaluate proposals
                                and select the best one?
                                   NPS added a maximum aggregate
                                   score of 40 points.
                                   NPS added a requirement that
                                   each selection factor used must have
                                   a maximum score of at least one
                                   point.
                                   NPS provided that the maximum
                                   score for the principal selection
                                   factor for franchise fees remains
                                   subordinate to the other principal
                                   selection factors listed in Sec.
                                   51.17(a).
                                   NPS provided that an offerors
                                   will receive one point for agreeing
                                   to the prospectus franchise fee or
                                   the minimum acceptable franchise fee,
                                   whichever is applicable.
                                   NPS included the prospectus
                                   franchise fee option when describing
                                   the scoring for the principal
                                   selection factor for franchise fees.
                                   NPS provided that the scores
                                   for secondary selection factors
                                   reflect the relationship between
                                   principal and secondary selection
                                   factors.
Sec.   51.17.................  What are the selection factors?
                                   NPS added a requirement to
                                   include a secondary selection factor
                                   for new services when appropriate.
Sec.   51.51.................  What special terms must I know to
                                understand leasehold surrender interest?
                                   The NPS is removing the term
                                   ``comprehensive'' from the definition
                                   of a major rehabilitation.
                                   The NPS is removing the term
                                   ``that the director approves in
                                   advance'' from the definition of
                                   major rehabilitation in paragraph
                                   (a).
                                   The NPS is removing the word
                                   ``solely'' from the definition of
                                   leasehold surrender interest because
                                   it is unnecessary. This is a non-
                                   substantive edit that will not change
                                   the meaning of the definition.
Sec.   51.73.................  What is the term of a concession
                                contract?
                                   NPS clarified the conditions
                                   for including option terms based on
                                   performance factors in new concession
                                   contracts including a three-year
                                   limit for such options.
                                   NPS clarified when the
                                   Director and concessioner may amend a
                                   concession contract to lengthen the
                                   term of a contract due to a
                                   substantial interruption of or change
                                   to operations including a three-year
                                   limit.
Sec.   51.76.................  May the Director amend a concession
                                contract to provide new or additional
                                visitor services or grant a concessioner
                                a preferential right to provide new or
                                additional visitor services?
                                   NPS included the
                                   administrative practice of amending
                                   operating plans for minor changes to
                                   visitor services.
                                   NPS included a list of
                                   possible changes that could lead to
                                   an operating plan or contract
                                   amendment.
                                   NPS deleted the provision
                                   regarding granting concessioners a
                                   preferential right to new or
                                   additional services.
                                   NPS added a provision that
                                   the Director should consider whether
                                   other operators adequately provide a
                                   service when considering whether to
                                   amend an existing contract to add a
                                   new service.
Sec.   51.78.................  Will a concession contract require a
                                franchise fee and will the franchise fee
                                be subject to adjustment?
                                   The NPS is modifying the
                                   language in paragraph (a) clarifying
                                   that the consideration in the capital
                                   invested to determine reasonable
                                   opportunity for net profit includes
                                   those funds required to be placed in
                                   special accounts identified in Sec.
                                   51.81.
                                   The NPS is moving
                                   requirements regarding the
                                   consideration of revenue to the
                                   Government compared to other factors
                                   to paragraph (c).
                                   The NPS is adding a new
                                   paragraph (b) providing a new means
                                   for the Director to determine the
                                   franchise fee for the contract as an
                                   alternative to the minimum franchise
                                   fee. This alternative method would
                                   include in the prospectus, a
                                   ``prospectus franchise fee'' set at a
                                   level to encourage competition for
                                   the concession opportunity through
                                   offers of higher franchise fees or
                                   lower franchise fees combined with
                                   enhanced or higher quality service
                                   offerings that exceed prospectus
                                   requirements.
                                   The NPS provides that the NPS
                                   will use the prospectus franchise fee
                                   unless such use is inappropriate, in
                                   which case the NPS will use the
                                   minimum acceptable franchise fee.
Sec.   51.81.................  May the Director include ``special
                                account'' provisions in concession
                                contracts?
                                   The NPS is revising paragraph
                                   (b) to add a requirement that the
                                   anticipated timing and estimated
                                   costs of component renewal projects
                                   should be identified in the
                                   prospectus.
                                   The NPS is expanding
                                   paragraph (b) to clarify that the
                                   component renewal reserve provides a
                                   mechanism for a concessioner to
                                   reserve monies to fund component
                                   renewal projects and that
                                   concessioner obligations to maintain
                                   assigned concession facilities
                                   including component renewal are not
                                   limited to the monies in the
                                   component renewal reserve.
Sec.   51.82.................  Are a concessioner's rates required to be
                                reasonable and subject to approval by
                                the Director?
                                   The NPS is removing the
                                   requirement provided in the proposed
                                   rule that the Director respond to
                                   rate requests within 30 days.
                                   The NPS is adding a new
                                   paragraph (d) that establishes more
                                   defined rules for how the Director
                                   responds to requests from
                                   concessioners to change rates and
                                   charges to the public. The provision
                                   requires that each contract include a
                                   schedule for rate requests and
                                   describe the information necessary to
                                   include in a complete rate request.
                                   Specific timelines for various rate
                                   approval actions by the Director and
                                   advanced rate charging allowances
                                   during the rate approval process have
                                   been included.
Sec.   51.87.................  Does the concessioner have an
                                unconditional right to receive the
                                Director's approval of an assignment or
                                encumbrance?
                                   The NPS removed the
                                   requirement in paragraph (i) that the
                                   request for approval of the
                                   assignment must be received 24 months
                                   or more after the effective date of
                                   the contract unless the requested
                                   assignment is compelled by
                                   circumstances beyond the control of
                                   the concessioner.
------------------------------------------------------------------------

Summary of Public Comments

    The NPS published a proposed rule in the Federal Register on July 
20, 2020, (85 FR 43775) and accepted comments on the proposed rule 
through the mail, by hand delivery, and through the Federal eRulemaking 
Portal at https://www.regulations.gov. The comment period closed on 
September 18, 2020. The NPS received 68 comments on the proposed rule 
from individuals and organizations. A summary of the pertinent issues 
raised in the comments and NPS responses are provided below. In 
general, the concessioner community generally supported the proposed 
rule. Some individual members of the public objected to expanding 
commercial

[[Page 90106]]

operations in national parks. Non-governmental organizations generally 
supported the proposed rule as a whole while objecting to some changes, 
citing perceived detrimental effects on the National Park System, small 
business, and the visitor experience. After considering public comments 
and after additional review, the NPS made several substantive changes 
in the final rule that are explained in the responses to comments 
below. Additionally, the NPS made non-substantive stylistic, 
formatting, and structural changes in the final rule.

General Comments

    1. Comment: Several commenters do not support allowing for 
commercial visitor service opportunities in the National Park System 
and expressed concerns that this will have a detrimental effect to both 
resources and the public, could change the nature of the visitor 
experience, and is contrary to the Organic Act.
    NPS Response: The NPS disagrees with these commenters. In 
accordance with statutory requirements contained in 1998 Act, the NPS 
provides commercial visitor services only when they are necessary and 
appropriate for public use and enjoyment of the unit of the National 
Park System in which they are located and are consistent to the highest 
practicable degree with the preservation and conservation of the 
resources and values of the unit. These statutory conditions are 
restated in the rule in regard to the introduction of any new or 
additional services. NPS adheres to these tenets in planning, 
solicitation and award and management of concession contracts.
    2. Comment: Several commenters assert that the rule could damage or 
disadvantage existing small businesses.
    NPS Response: The NPS disagrees that the rule will damage or 
disadvantage small businesses. The regulatory impact analysis conducted 
for this rule resulted in a determination that the rule will have a 
positive impact on small businesses. First, the rule changes are 
designed to improve the way that NPS solicits, evaluates, and 
administers concessions contracts. The vast majority of concessioners 
operating in parks (estimated 96%) are small businesses as defined by 
the Small Business Administration (SBA) and, as such, will benefit from 
the changes to the rule. Solicitations for concession contracts are 
full and open and any qualified businesses, including small businesses, 
may compete in such solicitations. In regard to whether new or 
additional services may impact small businesses outside the park unit, 
the NPS must consider the potential impacts on communities located near 
the park area when evaluating the potential to offer new and/or 
additional services. This includes potential impacts on small 
businesses. Additionally, when considering whether to amend the 
applicable terms of an existing concession contract to provide new or 
additional services, the rule requires the Director to consider the 
potential benefit to the visitor experience where other commercial 
operators (most of which are small businesses) in the same park area 
already adequately provide those services.
    3. Comment: One commenter requested that the NPS include in the 
rule a statement ``that concessions agreements are a legitimate 
strategy for meeting the financial needs for both park protection and 
infrastructure creation, operation and maintenance directly associated 
with visitor needs.''
    NPS Response: NPS declines to make this addition as the purpose of 
concession contracts are clearly stated in the 1998 Act and are 
reaffirmed in the regulation as currently written.
    4. Comment: One commenter expressed concern that the NPS failed to 
include regulations pertaining to the Visitor Experience Improvements 
Authority (VEIA) in the rule.
    NPS Response: The NPS declines to address the VEIA in this rule as 
these revisions to 36 CFR part 51 focus on concession contracts and not 
on other contract types for commercial visitor service that may be 
authorized under the VIEA.

New Concession Opportunities

    5. Comment: The NPS received some comments generally opposed to 
increasing commercial operations in parks and listed types of 
activities the NPS should prohibit in the regulation such as Amazon 
deliveries, food trucks, cell towers, Wi-Fi services, and other ``urban 
amenities.'' The NPS also received comments that the NPS should 
consider only the expansion of existing services rather than allowing 
entirely new services.
    NPS Response: NPS declines to include such a list because some of 
those activities may be necessary and appropriate in some parks and 
during some time periods. For example, food trucks for special events 
at the National Mall in Washington, DC, would provide additional 
visitor services during well attended events. Rather than listing 
specific activities to allow or disallow, the NPS relies on existing 
planning processes and the necessary and appropriate determination 
process to make park-by-park determinations of visitor services to 
include in a concession contract. In some instances, services available 
to the NPS and its employees are not subject to concession contracts 
(Amazon deliveries and Wi-Fi services). The NPS manages cell towers in 
the National Park System through other authorities and not concession 
contracts. The decision of what commercial visitor services to allow in 
individual parks considers park specific conditions. The NPS regional 
directors, upon advice from park superintendents, decide what 
commercial visitor services are necessary and appropriate. NPS avoided 
regulating any specific commercial visitor service to allow this 
discretion by those most familiar with park-specific conditions.
    6. Comment: Many commenters generally supported the idea of 
expanding visitor services citing topics such as economic development, 
modernization, and technology. Others suggested developing 
comprehensive criteria to evaluate new visitor service suggestions. The 
NPS also received a comment that the NPS should reevaluate currently 
provided commercial services that may be inadequate and should consider 
the public benefits of having multiple providers of a service, or 
multiple variations of a service, to suit differing visitor needs.
    NPS Response: The NPS appreciates these comments. The 1998 Act 
provides that the NPS may issue concession contracts only for 
commercial visitor services determined to be necessary and appropriate 
and consistent to the highest practicable degree with the preservation 
and conservation of the National Park System unit. The NPS complies 
with this direction through public planning processes guided by NPS 
Management Policies and related guidance. The NPS chooses to allow park 
managers and regional directors discretion to consider circumstances 
and conditions unique to a System unit rather than define one 
regulatory standard for the entire National Park System. Experience has 
shown that the existing policies and guidance provide sufficient 
standards to ensure continued preservation and conservation of System 
units as required by law.
    7. Comment: One commenter encouraged the NPS to establish an annual 
process for the Director to solicit ideas for new services (in addition 
to the recognition in the proposed rule that the NPS would do this 
during park-level planning processes). That commenter also stated the 
NPS should commit to consider a minimum number of proposals each year 
(suggesting 10).

[[Page 90107]]

    NPS Response: Considering these comments, NPS has included in the 
rule a provision to require the Director to annually solicit visitor 
service ideas through a process separate from the park planning 
processes. Proposals received for new visitor service and concession 
opportunities will be encouraged, reviewed, and responded to; however, 
NPS chose not to set a minimum number of proposals to consider as the 
NPS cannot predict or control how many such proposals it will receive.
    8. Comment: As proposed, the regulation stated no party will have a 
preference to a new contract that authorizes a suggestion submitted by 
that party. One commenter suggested deleting that language and creating 
a method to provide that party ``appropriate credit'' in the rating 
process. That commenter also suggested the NPS allow the suggesting 
party, if awarded the contract, to credit against franchise fees a 
``portion of the costs incurred . . . in generating a proposal for new 
or additional visitor services . . .'' The commenter suggested 
regulatory language to incorporate these concepts.
    NPS Response: The NPS declines to make such revisions. The 1998 Act 
included preferences for only two categories of concessioners--those 
whose operations generate under $500,000/year and those who met 
specific qualifications as outfitters and guides. The NPS thinks 
providing credit as suggested by this commenter would create a 
preference system not authorized by law. In addition, allowing a 
deduction for the costs of developing a suggestion to the Director 
could also provide a preference for the offeror that submitted the 
idea, as knowing it would recoup some of the cost of development might 
allow it to propose a higher franchise fee than other offerors, and, 
therefore, receive more points for the principal selection factor for 
franchise fees during the competitive evaluation process. Furthermore, 
allowing for the recoupment of development costs is uncommon in the 
private sector and other government contracting actions. The NPS sees 
no benefit in allowing such for concession contracts.
    In consideration of these concerns, however, the NPS added a new 
provision to Sec.  51.17(b) providing that the NPS will include a 
secondary selection factor requesting suggestions for new services when 
appropriate. This reflects a practice the NPS has used off and on for 
several years to encourage new ideas for commercial visitor services 
within the scope of the contract included in a prospectus and should 
allow entities that seek to provide new services in a park area to 
develop such ideas and receive appropriate credit as part of the 
competitive process.
    9. Comment: NPS received several comments expressing concerns that 
allowing new services may adversely affect businesses in nearby towns 
or the operations of other park concessioners or commercial operators.
    NPS Response: The final rule addresses this concern. In determining 
whether to issue a prospectus for a concession contract to provide such 
new concession opportunities, the Director shall consider relevant 
factors including whether the suggested opportunities are adequately 
provided within the park area by other authorized commercial providers; 
the potential for augmented resources for park area operations; the 
effects of the suggested concession operations on the park area; the 
sustainability of the suggested concession opportunities; the 
innovative quality of the suggestions; and the potential impacts on 
park area visitation and on communities located near the park area.
    10. Comment: The NPS received several comments about using the 
innovative quality of the suggested new services as one of the 
evaluation factors because some visitor service ideas, such as bicycle 
rentals, may not be innovative but could still provide a valued 
additional visitor service. Another commenter suggested NPS consider 
the impacts of new services to park operations and the sustainability 
of the new concession operation.
    NPS Response: The NPS chooses to keep the innovative nature of the 
visitor service as a factor to consider, however, it is by no means a 
controlling factor or intended to work to exclude new visitor services 
that are not considered innovative. The NPS also included consideration 
of the impacts of new services to park operations and the 
sustainability of the new concession operations.
    11. Comment: One commenter stated the NPS should set clear criteria 
in determining what visitor services to provide within a park, 
suggesting that this would include making the necessary and appropriate 
determinations. For many years, the NPS has relied on policy to guide 
this exercise of discretion.
    NPS Response: Both NPS Management Policies 2006 and the Commercial 
Services Guide have information on this process. The NPS declines to 
regulate more specific criteria for this decision process.
    12. Comment: One commenter stated the NPS should set a deadline for 
developing the process of seeking proposals for new visitor services. 
Another commenter recommended the NPS include broad agency input and 
include some outside parties in its evaluations. Finally, a commenter 
suggested creating a unique plan for Alaska.
    NPS Response: While the rule does not contain a specific timeframe 
for soliciting and reviewing proposals for new visitor services, it 
does require an annual process. The NPS, therefore, intends to 
implement the first solicitation of ideas as soon as practicable and 
before the end of the calendar year following the effective date of the 
final regulations. The NPS will consider suggestions for broad input in 
evaluating proposals for developing new visitor service opportunities, 
including those in currently underdeveloped Alaska park areas as the 
NPS constructs the new visitor service opportunity solicitation process 
and related guidance.

Timing of Issuing Prospectuses

    13. Comment: Several comments generally opposed or generally 
supported the elimination of the requirement to issue prospectuses not 
sooner than 18 months before the contract expires. Some commenters 
raised specific objections, often contradicted by other commenters (for 
example: ``it will increase competition'' and ``it will have no effect 
on competition;'' ``it will decrease the quality of bids'' and ``it 
will increase the quality of bids'').
    NPS Response: The NPS has decided to keep the language in the 
existing regulation retaining what we call the 18-month rule but 
allowing the Director to issue a prospectus earlier when necessary to 
provide additional time to potential offerors, such as when additional 
time is needed to avoid issuing a prospectus during a busy operating 
season or where potential offerors must make significant financial 
commitments to meet the requirements of the contract. This additional 
time will be as short as prudent.
    14. Comment: One commenter supported keeping the 18-month rule and 
suggested adding a requirement that the NPS not issue a prospectus 
during a busy operating season.
    NPS Response: The NPS has chosen to keep the 18-month rule. Some 
limited circumstances, however, could result in the need to depart from 
the 18-month rule. Generally, the NPS issues contracts with a January 1 
start date, rather than having contract start dates scattered over the 
year, keeping the inventory of contracts on a calendar year basis. 
Consequently, the 18-month rule would

[[Page 90108]]

prohibit the NPS from issuing a prospectus sooner than July 1 the year 
before the current contract expires. Since most recreation providers 
are busiest during the summer season, the 18-month rule results in the 
NPS either issuing a prospectus during the operator's busy season or 
delaying release until later that year. Preparing an offer during the 
busiest time of year can present many challenges for concessioners, 
especially for small businesses with limited staff. Delaying the 
release until later in the year, however, can result in the NPS needing 
to extend an existing contract for another year because of the time it 
takes the NPS to complete its evaluation process, announce the 
selection of the best proposal, and award the contract. In some 
circumstances the potential for contract extension out of necessity 
should be avoided by the issuing of a prospectus in advance of 18 
months prior to contract expiration, but as close to contract 
expiration as is prudent.
    15. Comment: Several commenters said the NPS should use the ability 
to extend contracts to provide more time during the solicitation and 
evaluation period rather than eliminating the 18-month rule.
    NPS Response: Contract extensions may be appropriate when necessary 
to ensure the continuity of visitor services and as such serve as a 
remedy where the circumstances surrounding the solicitation and 
evaluation of proposals within the allotted 18-month period may give 
rise to interruptions of services to the public. However, such 
extensions should be the exception and not the rule. The final rule, 
therefore, provides the NPS with flexibility in certain circumstances 
to use additional time for prospectus solicitation, evaluation and 
award, provided that additional time is a short as is prudent. This 
added flexibility to the 18-month rule is necessary, as the 18-month 
rule can leave insufficient time to solicit, evaluate, select and award 
contracts for several reasons. First, as described above, to avoid 
issuing prospectuses during the concessioners' (and likely 
competitors') busy seasons, the NPS has delayed issuing a prospectus 
until later in the year, which frequently leads to extending contracts. 
Second, for more complex contracts, the NPS frequently allows offerors 
four to five months to compile and submit proposals. Many of these 
contracts require notice to Congress at least 60 days prior to award 
(see 54 U.S.C. 101913(6)). All of this extra time often leads to the 
need for a contract extension. Third, even for less complex contracts, 
the rigorous evaluation and selection processes, providing the selected 
offeror time to review the terms of the contract, and allowing 
reasonable transition time also may give rise to the need for 
extensions of contracts.
    16. Comment: Several commenters pointed to the justification for 
including the 18-month rule in the 2000 regulations, that issuing 
prospectuses sooner that 18 months before contract expiration would 
result in too much uncertainty and speculation.
    NPS Response: The concerns raised have led to keeping the 18-month 
rule in the final regulations as a matter of general application, but 
with limited exceptions. Over the past 20 years, the NPS has developed 
a professional and reliable process to analyze information and develop 
prospectuses. The NPS relies on the incumbent concessioner's operating 
history and on industry metrics and the experience of long-time 
financial consultants and A&E firms. Where it is necessary due to 
operating circumstances to issue a prospectus more than 18 months in 
advance, the reliability of this information will not diminish by 
issuing a prospectus a few months earlier. That said, the NPS remains 
concerned with information becoming stale when issuing a prospectus too 
far in advance of a contract effective date. The NPS also anticipates 
for most contracts where circumstances require early release of a 
prospectus, the timing of such releases will move less than six months. 
In other rare circumstances, for example, the NPS may release a 
prospectus two years before expiration to accommodate a new 
concessioner's need to acquire expensive personal property such as 
passenger ferries. The NPS may award those well before operations 
commence to provide the new concessioner an awarded concession contract 
to rely upon to enter into acquisition agreements and necessary 
financing.
    17. Comment: Several commenters suggested keeping the 18-month rule 
and adding language requiring the NPS to demonstrate a need for an 
earlier prospectus release.
    NPS Response: The NPS has added criteria for the NPS to use to 
issue a prospectus earlier than 18 months before a contract expires. 
Applying these criteria will be the exception to the 18-month rule and 
will be supported by an administrative record. Modifying the 18-month 
rule to allow for earlier releases when necessary provides the NPS with 
the ability to time the issuance of prospectuses to meet many goals, 
including that of relieving concessioners of the burden of preparing 
proposals during a busy operating season, and of alleviating the 
uncertainty associated with a concessioner's future operations. As 
stated in the preamble to the proposed rule, it also allows the NPS to 
better design competition and award for contracts with substantial 
personal property investment. The NPS recognizes the concern 
represented by commenters opposing this change and will develop 
guidance on factors the NPS should consider in determining when to 
release a prospectus as well as additional steps the NPS could take to 
improve competition and the quality of proposals.
    18. Comment: A commenter suggested several processes the NPS should 
use to encourage more and better proposals including earlier disclosure 
of contract requirements, two rounds of questions and answers, and a 
more thorough debriefing process.
    NPS Response: The NPS will consider these as suggestions to 
consider in developing additional policy guidance but does not find it 
necessary to include such guidance in the final rule.

Publishing Notice of a Prospectus

    19. Comment: The NPS received three comments related to the 
publication of the notice of a prospectus release. None of the comments 
addressed the change in the regulation. One commenter suggested changes 
to the NPS practices of posting expected prospectus releases on the 
WASO Commercial Services Program website. Two supported publishing 
notice in trade publications (included in the existing rule). One 
suggested taking steps to notify the incumbent concessioner directly.
    NPS Response: The NPS sees no need to make changes to the rule as 
proposed based on these comments, which addressed the title of the 
publication and not the method, but will consider this input in 
developing any additional policy guidance regarding publication 
methods.

Weighting Selection Factors

    20. Comment: The NPS received one comment opposing the additional 
flexibility the proposed changes would provide the NPS due in part to 
the ambiguities in the proposed rule. On the other hand, the NPS also 
received many comments supporting additional flexibility in scoring 
proposals but asking for further clarification. Additional comments 
noted that each selection factor used should be worth at least one 
point.
    NPS Response: The proposed rule language, which provided 
considerable flexibility to the NPS to design proposal packages that 
reflected park area goals, unfortunately was vague and led to

[[Page 90109]]

differing interpretations of how the scoring would work. The final rule 
clarifies the scoring and recognizes the subordination of franchise 
fees and other consideration to the government to other principal 
selection factors. For consistency and clarity, the new language for 
Sec.  51.16(a) includes a maximum aggregate total point score of 40, 
which is 10 points higher than provided for in the existing 
regulations. The NPS believes the new maximum will provide additional 
flexibility for the NPS and reliability for those who submit proposals 
for new concession contracts. The final rule also includes a 
requirement that each selection factor used must have a maximum score 
of at least one point. In Sec.  51.16(a)(2) and (3), the final rule 
clarifies the scoring for secondary selection factors to reflect the 
relative scoring structure of the existing regulations, to wit: the 
maximum score for the secondary selection factor in Sec.  51.17(b)(1) 
must be lower than the maximum score for the principal selection factor 
for franchise fees and the maximum aggregate score for all other 
secondary selection factors must be lower than the maximum score for 
the principal selection factor for franchise fees. This retains the 
current scoring structure and continues to differentiate between 
principal and secondary selection factors.
    21. Comment: Many commenters pointed out the proposed rule did not 
provide that franchise fees and other consideration to the government 
would be subordinate to other principal selection factors as required 
by the 1998 Act and as incorporated into the existing regulations. In a 
related vein, several commenters requested that experience receive 
higher consideration than consideration of franchise fees and other 
consideration to the government, especially for high risk recreation 
activities.
    NPS Response: In Sec.  51.16(a)(1), the NPS added language to 
reflect the 1998 Act requirement that consideration of franchise fees 
and other consideration to the government will be subordinate to the 
objectives of protecting, conserving, and preserving resources of the 
park area and of providing necessary and appropriate visitor services 
to the public at reasonable rates, which are two of four statutorily 
mandated ``principal selection factors.'' Even though the foregoing 
statutory requirement subordinates consideration of franchise fees and 
other consideration to the government only to these two principal 
selection factors, the NPS decided to maintain the relative scoring 
structure of the existing regulations and also subordinate 
consideration of franchise fees and other consideration to the 
government to the experience and related background of offerors and the 
financial capability of offerors, which are the other two principal 
selection factors. The NPS also agree that experience in high risk 
operations should matter more than consideration of franchise fees and 
other consideration to the government, but thinks it should matter in 
all circumstances. And while the NPS did not receive comments asking to 
maintain the higher consideration for the principal selection factor 
regarding the financial capability of offerors over the principal 
selection factor for franchise fees and other consideration to the 
government, we recognize from twenty years of evaluating proposals that 
those supported by strong financial capability and understanding of the 
business opportunity translate into financially sustainable concession 
operations. As a result, the final rule provides that the maximum score 
for the principal selection factor regarding franchise fees and other 
consideration to the government must be less than the maximum score for 
the other principal selection factors set out in Sec.  51.7(a).
    22. Comment: The NPS received comments that supported continuing to 
award one point for agreeing to the minimum franchise fee.
    NPS Response: The NPS revised the proposed language to provide that 
the score for agreeing to the prospectus franchise fee or the minimum 
franchise fee (as applicable) set out in the prospectus would be one 
point.
    23. Comment: Several commenters pointed out that the scoring scheme 
in the proposed rule could result in a scoring anomaly where the 
franchise fee is undervalued inappropriately.
    NPS Response: The NPS thinks that the maximum aggregate score of 40 
points resolves this concern.
    24. Comment: One commenter suggested the NPS limit the score for 
franchise fees to 15% of the total score for all selection factors 
asserting that would retain the current approximate weight of that 
selection factor as against the other selection factor scores.
    NPS Response: The NPS declined to do this for two reasons. First, 
this could lead to a situation where the minimum and maximum scores for 
the principal selection factor for franchise fees would be other than a 
whole number, which would unduly complicate the panel evaluation 
process. For example, rather than having a range of scores from zero to 
four, the range could be zero to 3.705 or 5.47. Second, by adding the 
maximum score of 40 points, our calculations for various scenarios 
resulted in scores for principal selection factor 5 at or near levels 
under the existing regulations or around 15%. To reflect the change 
under Sec.  51.78 defining a new method of developing a ``prospectus 
franchise fee,'' the NPS included a reference to that type of franchise 
fee in discussing the scoring for the principal selection factor on 
franchise fees.
    25. Comment: The NPS received comments stating we should require 
disclosure of subfactor scores for every subfactor.
    NPS Response: The NPS declines to make this part of the regulatory 
change because each prospectus includes proposal instructions that vary 
little from one prospectus to the next. Those instructions contain a 
provision (which has been included in the prospectus instructions for 
many years) that all subfactors will receive the same weight unless the 
NPS specifies otherwise. The NPS believes this instruction sufficient 
for offerors to understand when we do and do not assign different 
scoring weights among subfactors. To enhance transparency, however, the 
NPS will develop guidance to disclose when subfactors are considered of 
equal weight beyond the language in the prospectus instructions.
    26. Comment: The NPS received a variety of comments suggesting we 
require specific topics for secondary selection factors such as using 
local businesses to support concession operations, efforts to attract 
lower income visitors, demonstrated knowledge or the NPS or the park 
area involved, and recommending additional visitor services.
    NPS Response: The NPS agrees these are good topics for secondary 
selection factors and have used variations of these in past 
prospectuses. Rather than requiring specific topics, however, the NPS 
thinks it important to develop topics for secondary selection factors 
as appropriate for the specific concession contract. The NPS will 
consider adding to existing policy guidance some of these topics to 
remind those who develop prospectuses of the value of these ideas.
    27. Comment: The NPS received comments asking the NPS to provide 
that certain commitments would receive additional points such as 
favoring minority or women-owned businesses or specific nonprofit 
organizations.
    NPS Response: The current regulatory language in Sec.  51.17(b)(2) 
provides direction in this regard.
    28. Comment: Several commenters stated the NPS should include 
requirements in the regulations to explain the allocation of points in 
each

[[Page 90110]]

prospectus and how we determined the minimum franchise fee.
    NPS Response: The NPS thinks the existing structure of proposal 
packages, which identify the NPS's objectives for protecting, 
conserving and preserving park resources and of providing necessary and 
appropriate visitor services at reasonable rates, currently discloses 
this reasoning. The NPS, however, will review existing policy guidance 
and consider whether we need to develop additional guidance on these 
topics considering the changes to the scoring as reflected in the new 
regulatory language. In addition, in Proposed Change # 8, the NPS has 
provided additional information on how it determines the minimum 
franchise fee.
    29. Comment: The NPS received a variety of comments suggesting 
additional process changes or guidance topics not directly related to 
the revision of scoring in the proposed rules. Those topics include 
making sure page limitations reflect the relative scoring weights among 
subfactors, having less restrictive operating plans to provide more 
opportunity for creative proposals, provide more detailed debriefing 
opportunities, exercise better contract management to enforce 
commitments made in proposals, and recognition of concessioners working 
with certain nonprofit organizations.
    NPS Response: The NPS will consider these when reviewing existing 
guidance.

Definition of Major Rehabilitation

    30. Comment: Several commenters did not support the change in the 
definition of major rehabilitation and proposed the existing definition 
should be retained. One of these commenters suggested the change in 
definition would lead to more LSI credit for maintenance that should 
have been routine, that the concessioner will delay and bundle projects 
in order to achieve more LSI at the lower threshold, and stated there 
is no evidence that franchise fees will be increased under the reduced 
threshold. A commenter suggested that the options presented all 
transfer costs to the NPS.
    NPS Response: NPS disagrees with these comments. As outlined in the 
preamble, the NPS accounts for LSI-eligible projects through the 
prospectus development process and considers these investments in the 
franchise fee analysis for the contract. The NPS has and will maintain 
procedures to approve facility improvement projects, monitor 
maintenance and component renewal needs, and other activities to ensure 
LSI-eligible projects are conducted in a timely manner and avoid 
unplanned LSI-eligible events.
    31. Comment: One commenter suggested that it should be explicitly 
stated that concessioners are responsible for maintenance and that 
clear standards should be set for maintenance and LSI eligibility.
    NPS Response: NPS declines to include a statement in the rule 
regarding maintenance responsibilities as those responsibilities are 
clearly defined in the standard concession contract. NPS already has 
standards for maintenance and LSI eligibility in the standard 
concession contract and policy but will review its policy and update as 
necessary.
    32. Comment: One commenter recommended that NPS remove the term 
``comprehensive'' from the definition of major rehabilitation in 
Section 51.51 because existing criteria in the regulation make clear 
that LSI applies only where the investment is substantial and adding 
the undefined term ``comprehensive'' appears unnecessary and risks 
confusing the standard.
    NPS Response: NPS agrees that the term ``comprehensive'' is vague 
and an unnecessary modification of the term ``major rehabilitation'' 
and therefore has been removed from the rule. A major rehabilitation is 
a planned rehabilitation of an existing structure that will either 
enhance the property's overall value, prolong its useful life, or adapt 
it to new uses and therefore could involve a number of separate planned 
actions that collectively and in combination are a major rehabilitation 
that benefits the subject structure.
    33. Comment: Several commenters recommended additional 
modifications to the definition of major rehabilitation projects 
eligible for LSI. Commenters proposed that a LSI-eligible major 
rehabilitation should include ``any qualified capital investment 
approved by the Director in advance and vital to the visitor health, 
safety and enjoyment or the health and safety of NPS and concession 
employees with the life expectancy of at least 30 years.'' Commenters 
also proposed that a LSI-eligible major rehabilitation should be any 
``Capital Improvements as defined by Generally Accepted Accounting 
Principles (GAAP) or . . . is a qualified capital investment approved 
by the Director. . .''. The commenter separately indicated that the 
criteria for what work on existing capital improvements can qualify for 
LSI must incorporate the Congressional intent of ``capital 
improvements,'' whether as defined under GAAP or some other commonly 
used industry definition.
    NPS Response: The NPS declines to incorporate these recommendations 
as presented, but has included a more detailed definition of major 
rehabilitations eligible for LSI to provide clarity and more closely 
track industry standards. NPS has described why the use of GAAP is not 
an appropriate standard for this purpose in the report titled 36 CFR 
[part] 51 Concessions Contract Revisions Regulatory Impact Analysis 
(RIA) and Initial Regulatory Flexibility Analysis (IRFA)'' that can be 
accessed at https://www.regulations.gov in Docket ID: NPS-2020-0003. 
Instead, the final rule defines an LSI-eligible major rehabilitation to 
be a planned rehabilitation of an existing structure where the 
construction cost exceeds thirty percent of the pre-rehabilitation 
value of the structure and the work performed improves visitor health, 
safety, and enjoyment or the health and safety of concessioner 
employees and will either enhance the property's overall value, prolong 
its useful life, or adapt it to new uses. The NPS selected the 30% 
threshold through industry research, specifically the International 
Facility Management Association, and the requirement that the work 
``either enhance the property's overall value, prolong its useful life, 
or adapt it to new uses'' relies on common industry understanding of 
the term ``capital improvement.'' The NPS declines to include projects 
for NPS employee safety in the definition of LSI-eligible major 
rehabilitations since projects for that purpose are not specifically 
relevant to concession contracts. NPS does not include a 30-year life 
expectancy condition for qualifying major rehabilitations but does 
include that the work must either enhance the property's overall value, 
prolong its useful life, or adapt it to new uses.
    34. Comment: One commenter suggested the proposed changes to the 
LSI eligibility threshold should apply to existing contracts and not 
only new contracts.
    NPS Response: NPS declines this recommendation. NPS will not apply 
changes to the LSI eligibility to existing contracts as changing the 
LSI structure would change the financial terms of the concession 
contract and would be a material change to the opportunity that was 
initially solicited.
    35. Comment: One commenter suggested that the NPS allow LSI for 
employee housing for concessioners or for the housing of both NPS and 
concessioner employees.
    NPS Response: No change is needed to the rule. Concessioners may 
already obtain LSI for capital improvements for

[[Page 90111]]

employee housing where it is determined to be necessary during the 
prospectus process. However, a concessioner cannot build dedicated NPS-
employee housing under a concession contract as such capital 
improvements are not a commercial visitor service.
    36. Comment: One commenter proposed that the criteria for defining 
fixtures be modified through policy.
    NPS Response: NPS is not taking any action in the rule but may 
consider this recommendation if appropriate in policy as suggested.
    37. Comment: One commenter encouraged the NPS to use the 
alternative method formula (aka straight-line depreciation) allowed for 
contracts where LSI is estimated to exceed $10 Million.
    NPS Response: The NPS already uses this formula where the NPS 
determines it is appropriate.
    38. Comment: One commenter suggested that NPS allow concessioners 
to negotiate third party agreements that provide the concessioner with 
reimbursement rights that survive both during and after the length of 
the concession contract. For example, a ferry concessioner may 
negotiate with the third party for the right to recover a docking fee 
for use of the constructed facility over a certain number of years, 
extending beyond the end of the concession contract, as well as a 
provision for an incoming concessioner to buy out that right. While the 
NPS would not confer these rights to the concessioner, NPS would allow 
these agreements, and would have to disclose them to a new incoming 
concessioner. The commenter suggested that allowing concessioners a 
better third-party reimbursement approach could incentivize and 
encourage even more essential and complementary projects--dock and dock 
repairs, seawalls, roadways, parking, lighting, shelters--that greatly 
improve visitor services for the park.
    NPS Response: NPS is not taking any action in the rule but may 
consider this recommendation if appropriate in policy as suggested. 
There is nothing currently in the regulation that requires NPS approval 
of these third-party arrangements; however, when the NPS determines 
that third-party capital investment could potentially be required, the 
NPS takes this investment into consideration when determining the 
franchise fee for the contract.

Term of Concession Contracts

    Most commenters supported the proposed changes to Sec.  51.73 that 
primarily set out circumstances when the NPS may add additional 
operating time to a concession contract without invoking the extension 
authority of Sec.  51.23 to avoid an interruption of visitor services. 
When reviewing the proposed changes to the rule, the NPS noticed an 
error in Sec.  51.73(a) in the following sentence: ``The Director will 
issue a contract with a term longer than 10 years when the Director 
determines that the contract terms and conditions, including but not 
limited to the required construction of capital improvements or other 
potential investments related to providing both required and authorized 
services, warrant a longer term (emphasis added).'' To clarify, when 
developing the financial analysis for a new concession contract, the 
NPS analyzes the financial profile of providing the required visitor 
services but not the authorized visitor services as a concessioner may 
choose not to offer the authorized visitor services. Consequently, the 
final rule deletes the italicized words in the quoted language above to 
accurately reflect the financial requirements of the new contract.
    39. Comment: Several commenters wanted the NPS to retain the phrase 
``should be as short as prudent'' in Sec.  51.73(a), stating the phrase 
reinforced Congressional intent to support competition for concession 
contracts.
    NPS Response: The proposed rule deleted the phrase ``should be as 
short as is prudent'' from Sec.  51.73(a). The phrase was not 
reflective of the statutory requirements, as the language of the 1998 
Act expresses no preference for the shortest possible term.
    40. Comment: One commenter wanted the NPS to delete the phrase 
``years (unless extended in accordance with this part)'' from the end 
of the first sentence of Sec.  51.73(a) asserting it was inconsistent 
with Congress limiting the length of concession contracts to 20 years.
    NPS Response: The NPS declines to make that change. The subject 
phrase appears in the existing regulation, recognizing that the 
authority under Sec.  51.23 to extend contracts to avoid an 
interruption of visitor services applies to concession contract no 
matter the length of the term.
    41. Comment: The proposed language for Sec.  51.73 (b) appeared to 
create confusion among commenters and may not have accurately reflected 
the NPS's intent for the two situations for option terms.
    NPS Response: The NPS has revised the language to clarify these 
provisions. The first situation provides that the NPS may include 
contract terms that allow a concessioner to have additional option 
years for meeting NPS-defined performance criteria, which includes 
evaluation ratings criteria (the NPS refers to this as the performance 
option). The second situation provides that the Director (outside the 
express terms of a concession contract) may provide a concessioner 
additional operating terms for substantial interruption in operations 
(the NPS refers to this as the interruption option). For the 
performance option, the NPS would develop opportunities for new 
concession contracts providing additional operating years if the 
concessioner performs at a defined evaluation level and meets other 
performance metrics (for example, occupancy during shoulder season or 
visitor satisfaction scores). The NPS would describe those performance 
metrics in the draft contract included in a prospectus to reflect the 
NPS's priorities for that operation. The NPS will develop additional 
guidance on this process.
    42. Comment: Some commenters expressed concern with the timing of 
exercising performance options.
    NPS Response: The NPS understands the issues with timing and the 
prospectus process. The NPS has used this in one current contract, 
which set out the time by which the Director must determine the 
concessioner has met the performance criteria and the time in which the 
concessioner must agree to exercise the option. That contract also had 
provisions for continued levels of performance after exercise of the 
option to support continued successful operations. The timing 
recognizes the need for the NPS to commence prospectus development for 
a new contract at a certain point should the concessioner not achieve 
the performance criteria or decide to not exercise the option for 
additional time.
    For the interruption option, the Director would exercise his or her 
discretion to amend an existing unexpired contract to provide 
additional operating time when events outside the control of the 
concessioner cause a substantial interruption of or change to 
operations. This ability of the Director to take such action does not 
need to be an express part of a concession contract and is an exercise 
of the Director's discretion and authority under the 1998 Act.
    The NPS added language clarifying that both options are subject to 
the statutory requirement that concessions contracts, including 
options, are limited to terms of 20 years. One commenter wanted that 
limitation struck from the regulation, but the NPS does not find the 
statutory authority to do so. Other commenters urged the NPS to limit 
the

[[Page 90112]]

length of performance options and one suggested a limit of three years 
like contract extensions. The NPS agrees and has included language for 
such limitation, thereby adopting for option years Congress' expressed 
preference of a three-year maximum when it comes to increasing the 
length of time a concessioner may provide visitor services.
    43. Comment: Several commenters asked for clarification surrounding 
the issue of ``favorable annual ratings'' for performance options as 
used in the proposed rules. Several commenters asked the NPS to define 
``favorable.''
    NPS Response: The NPS has a comprehensive concessioner evaluation 
system that has the following levels of ratings: superior, 
satisfactory, marginal, and unsatisfactory. Just a few years ago, the 
superior level did not exist, but was added as a matter of guidance. 
NPS believes it important to retain the flexibility to adjust how we 
evaluate concession operations and describe performance levels as a 
matter of guidance and not of regulation. At this time, a favorable 
rating would be at the satisfactory or superior level.
    44. Comment: Several commenters objected to the requirement of a 
favorable annual rating for every year of the contract citing issues 
with the NPS's evaluation system and subjectivity of park managers. 
Some commenters wanted the NPS to eliminate any requirement regarding 
evaluation ratings.
    NPS Response: NPS agrees that a favorable rating, which documents 
that a concessioner is meeting the terms of the concession contract, 
should not be required for every year of the contract but otherwise 
disagrees with those comments. Generally, a favorable rating indicates 
that a concessioner is meeting the terms of the concession contract, 
which seems a minimum expectation, but an unusual instance of poor 
performance should not be used to frustrate the award of additional 
operating time where performance otherwise justifies such an award. 
Rather than define the requirement in the regulation, however, the NPS 
proposes to define all performance requirements in the individual 
contracts, including the operational goals the concessioner must meet 
and the evaluation ratings the concessioner must achieve.
    45. Comment: NPS received one comment suggesting the rule authorize 
amending a contract to provide an additional operating term for new or 
unanticipated mid-contract investments.
    NPS Response: NPS declines to include this in the final rule as it 
has not evaluated the potential economic consequences of such a change.
    46. Comment: NPS received a comment suggesting additional actions 
NPS could take to encourage high performance from concessioners such as 
reducing franchise fees in later years of a contract.
    NPS Response: NPS did not analyze the consequences of reducing 
franchise fees in later years of contracts and does not understand the 
economic consequences of such action, especially as it would affect the 
NPS's ability to plan for use of franchise fees. Also, NPS did not 
include such item in the proposed rule and receive public comment on 
such action.
    47. Comment: A commenter suggested the NPS solicit additional ideas 
from concessioners to incentivize their performance and earn 
performance options.
    NPS Response: The NPS declines to add such process to the 
regulation but may consider it in guidance. The NPS intends to use 
performance options to meet its goals. The NPS is not sure if meeting 
the concessioners' goals would meet the NPS's objectives and needs to 
evaluate such an idea further. The NPS also received comments raising 
questions about how we would implement performance options when a park 
has multiple operators providing the same or similar service under a 
group of contracts. The NPS will address these situations on a case by 
case basis as it develops prospectuses using such options.
    48. Comment: Several commenters stated the NPS should not shorten 
the ``base term'' in order to provide for options.
    NPS Response: The NPS interprets ``base term'' as meaning ten years 
and thinks the comment means that contracts with performance options 
should have an initial term of ten years before options. The NPS 
appreciates this perspective, but will not add language to the 
regulation to include such a provision. The NPS will consider the 
concern in developing guidance for performance options. It is not the 
intent of the rule to have the availability of performance options 
affect the base term in any way. The base term must reflect the 
financial requirements of the contract. Several commenters stated the 
concessioner should be able to refuse to exercise an option. The final 
rule provides that it is the concessioner that would exercise the 
option once the Director has determined the concessioner has met the 
performance criteria. An allowance to exercise an option includes the 
ability to decline the exercise of the option.
    49. Comment: For interruption options, one commenter stated the 
rule should specify that the NPS can require no other contract changes 
unless the concessioner agrees.
    NPS Response: The NPS chooses not to include such a restriction in 
the regulation, believing that it could unduly constrain the Director's 
discretion.
    50. Comment: The NPS received comments on other incentives it could 
offer to enhance concessioner performance as well as encouragement to 
increase the length of contracts.
    NPS Response: The NPS appreciates these comments. As for contract 
length, the NPS again reminds commenters that Congress defined the 
maximum contract term as 20 years and that stated contracts generally 
should be ten years or less.

New or Additional Services

    Many comments supported the concept of adding new or additional 
services to existing concession contracts. The NPS received suggested 
revisions from industry trade groups and some individual concessioners.
    51. Comment: For Sec.  51.76(a), one commenter suggested revising 
the regulatory language to specifically allow for adjustments to 
existing services that could be provided by changes to the operating 
plan (which is an exhibit to and part of a concession contract). That 
commenter proposed using a metric measured against existing gross 
receipts as a method for determining when new or additional services 
could simply be added to a contract's operating plan by a 
superintendent or must be added to the main body of the contract 
through a formal amendment executed by the Director.
    NPS Response: The NPS declines to make this change as it overly 
complicates current practices not subject to a specific rule, such as 
expanding operating hours for a store or extending operating seasons 
for a lodging facility.
    52. Comment: A commenter proposed to add criteria for consideration 
involving contribution to visitor enjoyment and understanding of the 
System unit and the National Park System.
    NPS Response: The NPS-proposed language in Sec.  51.76(a) is nearly 
identical to the statutory language in the Centennial Act, and the NPS 
declines to add to the statutory criteria. Additionally, the suggested 
supplemental criteria, enhancing visitor experiences and contributing 
to visitor understanding and appreciation of a

[[Page 90113]]

unit, already are part of the necessary and appropriate determination.
    53. Comment: A commenter proposed rule language that would require 
keeping the franchise fee at the existing level after adding new or 
additional visitor services.
    NPS Response: The NPS declines to make that change. Although rare, 
some changes could provide substantial revenue gains to the 
concessioner without significant added expense. For example, increasing 
the number of passengers a concessioner could transport on a vessel 
creates little additional expense but adds considerable additional 
revenue on a passenger by passenger basis. The NPS sees no reason to 
prohibit the NPS from sharing the financial benefits of such a change.
    54. Comment: A commenter proposed a sample list of actions that 
could be considered new or additional services.
    NPS Response: The NPS included a list of such actions in the rule.
    55. Comment: Several commenters requested a provision prohibiting 
adding new and additional services to a concession contract if other 
concessioners already provide the service in the System unit.
    NPS Response: 36 CFR 51.77 provides ``Concession contracts will not 
provide in any manner an exclusive right to provide all or certain 
types of visitor services in a park area. The Director may limit the 
number of concession contracts to be awarded for the conduct of visitor 
services in a particular park area in furtherance of the purposes 
described in this [Part 51].'' The NPS thinks that these commenters 
raised a valid concern, and Sec.  51.77 allows recognizing such 
concern. Consequently, the NPS has added language stating the Director 
should consider whether other commercial operators in the park area 
already provide the services adequately. Although the NPS received no 
comments on the proposed subsection (b), we deleted it because it 
implemented a provision in the 1998 Act replaced in the Centennial Act.

Setting Franchise Fees

    56. Comment: Several commenters supported the proposed changes to 
the rule clarifying how the NPS sets the franchise fee.
    NPS Response: No proposed action or response is required.
    57. Comment: One commenter indicated that the NPS should expand the 
scope of the data it uses to determine the minimum franchise fee beyond 
``relevant hospitality industry data'' to include outdoor recreation 
industry data.
    NPS Response: The NPS currently uses such data and has incorporated 
such revisions to the rule.
    58. Comment: One commenter suggested that the NPS should use 
current practices to establish the minimum acceptable franchise fee and 
then reduce that minimum franchise fee by 25% when posting that minimum 
franchise fee in the prospectus. The commenter suggested that it would 
allow offerors to compete as Congress intended by letting offerors 
propose what they believe is the best balance of efforts to protect 
park resources and provide quality visitor services (which are the 
primary selection criteria) along with the most competitive fee.
    NPS Response: After reviewing comments and internal deliberation, 
NPS will provide an alternative to its current practice of setting a 
minimum franchise fee. This alternative will be to set a ``prospectus 
franchise fee'' and allow offerors to either propose a higher franchise 
fee, or a lower franchise fee when combined with enhanced or higher 
quality visitor services offerings that exceed prospectus requirements, 
as allowed in the 1998 Act.
    59. Comment: Several comments indicated NPS should expand on data 
provided in the prospectus to include additional hospitality 
statistics, profitability measures, return on investment assumptions or 
more thoroughly describe the steps associated with calculating the 
franchise fee.
    NPS Response: The NPS declines this suggestion. NPS indicated in 
the proposed rule that it would provide the basis for its franchise fee 
analysis and retains this proposal in the final rule. However, NPS will 
not expand the information provided beyond this basis because NPS will 
continue to expect offerors to complete their own due diligence to 
present their understanding of the business opportunity.
    60. Comment: One commenter recommends NPS adopt a policy of setting 
minimum franchise fees below ``breakeven,'' to maintain essential 
flexibility and to guard against bids that are pre-planned to reduce 
the performance levels. The same commenter suggested that the NPS set 
the minimum franchise fee to balance requirements, risks, costs and 
potential challenges throughout the contract.
    NPS Response: The NPS declines this suggestion. Any franchise fee 
set by the NPS is determined in accordance with the 1998 Act, 
considering the probable value to the concessioner of the privileges 
granted by the particular contract involved based upon a reasonable 
opportunity for net profit in relation to capital invested and the 
obligations of the contract. Artificially lowering the fee below this 
determination would be contrary to this statuary requirement. However, 
the NPS has included in the rule a new, alternative means to set the 
franchise fee in the contract. This alternative approach allows the NPS 
to use a ``prospectus franchise fee,'' which is still based upon the 
probable value determination mentioned above, but also allows offerors 
to offer a higher franchise fee, as they have traditionally done, or a 
lower franchise fee when combined with enhanced or higher quality 
visitor service offerings that exceed the requirements of the 
prospectus. The NPS also retains the current means to establish a 
minimum acceptable franchise fee when the NPS determines using a 
``prospectus franchise fee'' is inappropriate for the particular 
concession opportunity.
    61. Comment: One commenter provided a statement that references 
uniformity in franchise fees in situations where there are multiple 
contracts for outfitting, guiding, river running or similar services. 
This NPS assumes this is in reference to Sec. 411 of the 1998 Act (54 
U.S.C. 101921). The commenter also provided a statement that suggests 
that this would discourage bidding up of franchise fees.
    NPS Response: No proposed action or response to the commenter's 
statements is required. NPS abides by the terms of the 1998 Act when 
setting the minimum franchise fee for these types of contracts.

Special Accounts

    62. Comment: All commenters on these changes supported replacing 
the term ``Repair and Maintenance Reserve'' with ``Component Renewal 
Reserve.''
    NPS Response: None.
    63. Comment: A few commenters suggested that the NPS should 
consistently set out a description of CRR-eligible projects in the 
prospectus to help offerors more accurately assess and take into 
account the scope and cost of these activities.
    NPS Response: The NPS agrees with the commenters, and the final 
rule requires that the timing and estimated costs of anticipated 
component renewal projects be identified in the contract.
    64. Comment: Several commenters suggested changes to how the NPS 
distributes any CRR that remains at the end of the contract, which is 
currently returned to the park as franchise fees. One commenter 
suggested NPS issue administrative guidelines that would allow 
concessioners to share in any excess funds being left in the CRR fund.

[[Page 90114]]

The commenter indicated this would incentivize concessioners to seek 
cost savings when undertaking CRR-eligible projects. The same 
concessioner suggested the NPS include in the rule, a process for 
funding unanticipated CRR costs that arise during the term of the 
contract through an addition to the special account resulting from 
either a reduction in franchise fee rate or generated from other 
revenues, such as surcharges on concessioner-offered goods and 
services. A second commenter stated that the funds left in the reserve 
should be returned to the park unit as something other than franchise 
fees because the commenter believes that returning the funds as 
franchise fees allows the NPS to spend the funds for park unit needs 
that are not concession related.
    NPS Response: The NPS disagrees with these recommendations. In 
regard to the NPS adjusting the franchise fee or otherwise funding the 
concessioner for unanticipated CRR projects, the component renewal 
reserve provides a mechanism for a concessioner to reserve monies to 
fund component renewal projects. However, concessioner obligations to 
maintain assigned concession facilities are not limited to the monies 
in the component renewal reserve. Additionally, franchise fee changes, 
including for the purpose of adjusting the component renewal reserve, 
cannot occur during the term of the contract unless it is in accordance 
with the franchise fee reconsideration procedures in the 1998 Act. In 
regard to allowing concessioners to retain a portion of the unspent CRR 
that remains at the end of the contract, this could create an incentive 
for the concessioner to avoid spending the CRR, not just be more 
efficient in their expenditure. Historically, the balance of the 
reserve was returned to the concessioner as has been recommended, and 
the NPS found these funds in fact, were often not expended when 
appropriate and facilities were inadequately maintained. Further, the 
concessioner has already benefited from the CRR as the reserve 
percentage is accounted for in the probable value calculation used to 
set the franchise fee. Regarding CRR funds that might be returned to 
the NPS as a franchise fee, the NPS has policies that prioritize use of 
franchise fees paid to the NPS for concession-related purposes such as 
prospectus development, saving for LSI payment and concession program 
management before any other park unit needs. Furthermore, to avoid the 
need to convert such component renewal reserves, NPS has in place and 
continues to develop processes including periodic reserve audits, to 
ensure that reserve funds are used during the term of the contract to 
address appropriate component renewal projects and avoid deferred 
maintenance for concession facilities.
    65. Comment: One commenter suggested that concessioners should be 
able to ``deposit'' additional reserve funds during the contract term 
to address projects that need more funding than what is available in 
the reserve.
    NPS Response: The NPS declines to address this in the rule. The NPS 
will consider the proposal for forward funding to address such needs as 
a change in policy and/or contract terms.
    66. Comment: One commenter recommends that the NPS include, as part 
of the solicitation, a prospectus selection factor to gain ``points'' 
for proposals that include, as a commitment, an increase in the reserve 
percentage.
    NPS Response: NPS declines this recommendation. Concessioners are 
responsible for all maintenance regardless of the amount of funds that 
are available in the CRR. Offerors should not be given extra points 
just to meet what is a contractual obligation because they reserved 
such funds. Concessioners may set aside additional reserves outside the 
CRR as an internal business practice.

Concessioner Rates

    67. Comment: Several commenters expressed concern regarding the 
change to the rule that would emphasize competitive market pricing, 
indicating that prices to visitors will rise due to the change and 
visitors will be priced out of staying in parks. A different commenter 
suggested that it is the concessioner's goal to set prices as high as 
possible, not considering the diversity of park visitors from a variety 
of income levels. That commenter stated visitors should pay reasonable 
rates and concessioners should help encourage all visitors to enjoy our 
national parks and the services and products concessioners provide, 
implying perhaps that the rule changes would prevent this from 
happening. Another commenter provided statements that it is not clear 
on how competitive market declaration pricing will impact rates (some 
could be higher, others, lower).
    NPS Response: The NPS disagrees with these comments. The changes in 
the rule to provide in most cases for competitive market declaration 
(``CMD'') pricing implement rather than depart from statutory 
requirements. The final rule clarifies the NPS's commitment to ensuring 
that rates and prices are set in accordance with market forces to the 
maximum extent possible, as the1998 Act requires; that is, rates are 
reasonable and appropriate, and the process for approving rates is as 
unburdensome to the concessioner as possible. CMD represents the best 
means to meet these objectives. As noted in the preamble, the NPS 
recognizes there may be situations where market forces are not adequate 
for a CMD to provide for reasonable and appropriate rates. The NPS will 
use other rate approval methods such as direct comparability in those 
circumstances. With regard to meeting the needs of a diversity of 
visitors, the NPS strives to offer a variety of service levels, thereby 
providing options to account for diverse preferences. For example, 
dependent upon the size of park, there may be upscale to rustic (e.g. 
camping) lodging options, and food and beverage options from fast 
casual to formal sit-down restaurants offering a range of price points 
as dictated by the market.
    68. Comment: One commenter suggested the revisions to the rule 
would curtail the ability of the Director to approve rates, that they 
would not be effective because some parks are located in remote 
locations where competitive markets are scarce and that this market 
emphasis would place significant burden on the NPS to prove the 
inadequacy of market forces.
    NPS Response: The NPS disagrees with this comment. The burden upon 
the NPS to complete rate approvals has not changed; the NPS remains 
responsible for determining whether to use CMD or the appropriate 
alternative rate method, to monitor the operations to ensure the rate 
method continues to be appropriate, to approve rates when CMD is not 
being used, and monitor rates. These features of the rate 
administration process remain unchanged. The rule reinforces that CMD 
is the preferred method and should be used unless rates using this 
method would not be reasonable and appropriate. The NPS has, however, 
defined specific timelines that will apply in order to ensure it takes 
action to review and approve rate requests in a reasonable timeframe.
    69. Comment: One commenter suggested the rule should include a 
statement to address improved accessibility as a requirement for new 
contracts or modified pricing.
    NPS Response: The NPS disagrees with this comment. Concessioners, 
as expressly set forth in their contracts, are already required to 
provide accessible services as operational and facility requirements in 
accordance with statutes, regulations, and NPS policy.

[[Page 90115]]

Additionally, the requirement for accessibility is not directly 
relevant to prices and rates.
    70. Comment: One commenter suggested the NPS should consult with 
the Interior Business Center (IBC) or an alternative external source 
(i.e., hospitality consultants) as part of its rate review process.
    NPS Response: The NPS declines to add this requirement to the rule. 
The IBC does not have the hospitality expertise to complete such 
reviews. The NPS currently uses trained concession specialists to 
complete analyses to review rate requests and already uses its 
hospitality consultants as needed to provide assistance, particularly 
during the prospectus development process and when there are especially 
complex issues. The NPS will continue these practices. The NPS also 
notes that involvement by third parties in all circumstances would 
inhibit the ability for a timely response to concessioners.
    71. Comment: Numerous commenters supported the change in the rule 
that requires the NPS to codify and reduce the current policy-defined 
response time for rate requests from 45 to 30 days when possible. Many 
commenters suggested that additional steps should be taken (either 
independently or in some combination) such as:
    (a) Notifying concessioners within a certain window of time if a 
request is not ``complete and timely,'' no later than 10 days after 
receipt of request;
    (b) Removing the ``when possible'' qualifier that describes the 30-
day approval window;
    (c) De facto approval of rates in 45 days without NPS action;
    (d) That NPS notify a concessioner within 15 days of receipt of a 
rate request if additional information to support the rate request is 
necessary; and
    (e) Defining what constitutes a ``response'' from NPS.
    NPS Response: The NPS agrees that any rate requests should be 
responded to in a substantive and timely manner. To that end, NPS has 
established in the final rule detailed timelines and procedures the NPS 
will follow in responding to rate requests. These timelines will be met 
unless there are extraordinary circumstances. In the event that the 
timeline is not met and there are no extraordinary circumstances, the 
concessioner will be able to charge the requested rates until the 
Director makes a rate approval determination without being subject to 
retroactive adjustment.
    72. Comment: Numerous commenters had varying comments on rate 
structures and CMD. Most commenters supported using CMD but had 
different suggestions surrounding its application, either to policy or 
the rule itself. For example, one commenter suggested the NPS should 
eliminate clarifying examples provided in the preamble to the rule on 
when CMD might not apply because there is not a competitive market. A 
commenter wanted the rule to state that a comparability study is not 
required to establish CMD reasonable rates. Another commenter suggested 
that rate setting for comparability should be based on ``unbundled 
rates'' (likely referring to situations such as a tour service where 
the tour price may have associated fees attached such as for an audio-
tour provided through another party) and that such situations should be 
identified in the rule as a ``due consideration'' factor in 51.82 (b). 
The same commenter also suggested changes to the rule to create 
distinctions between what it calls ``market rate'' (the highest 
visitors show they are willing to pay), ``direct price'' (stated as 
lower than market price) and ``final'' prices paid by the consumer. One 
commenter expressed concern that CMD rates could result in increased 
franchise fees to be paid to the NPS without accounting for the trend 
in increasing expenses to the concessioner and that additional 
requirements could be imposed if NPS changes the rate approval method 
during the term of the contract.
    NPS Response: The NPS may consider these comments if appropriate, 
when it establishes or adjusts policy for rate administration to 
implement this regulation, but the NPS declines to address these 
recommendations in the rule.
    73. Comment: A commenter recommended that NPS should provide 
national permission to use an anticipated rate method where competitive 
market declaration is not utilized.
    NPS Response: The NPS declines to include this recommendation in 
the rule. The NPS already allows advanced rates as a matter of policy 
where appropriate and will continue this practice. The NPS has, 
however, included in the rule specific advance rate procedures for the 
time after a concessioner has submitted a complete rate request but 
before the NPS has made a decision approving or disapproving the 
request to ensure that the concessioner can take appropriate steps to 
advertise and take reservations during this period.

Timing of Assigning Contracts

    74. Comment: A number of commenters disagreed with the proposed 
restriction on assigning concession contracts. Most of these commenters 
focused on the unique circumstances of concessioners holding qualified 
contracts and, thus, holding a right of preference to a new concession 
contract. Commenters asserted that the combination of needing to 
operate satisfactorily for two years under an existing contract and a 
24-month delay in submitting a request to transfer the contract to a 
new operator unfairly restricts the transfer of such contracts.
    NPS Response: Although the NPS thinks it is reasonable to require 
24 months of operations under a concession contract before submitting a 
request to transfer the contract, we have decided to withdraw this 
proposed change in consideration of the many comments criticizing this 
prohibition as too restrictive. The NPS will develop policy and 
procedures, however, that require the authority approving requests for 
assignments of contracts to carefully scrutinize the ability of the 
purported new concessioner to provide the required services based on 
that entity's specific experience and financial ability to carry out 
the terms of the concession contract.

Compliance With Other Laws, Executive Orders, and Department Policy

Regulatory Planning and Review (Executive Orders 12866, 13563, and 
14094)

    Executive Order 12866 provides that the Office of Information and 
Regulatory Affairs (OIRA) in the Office of Management and Budget will 
review all significant rules. OIRA has determined that this rule is 
significant.
    Executive Order 14094 amends Executive Order 12866 and reaffirms 
the principles of Executive Order 12866 and Executive Order 13563 and 
states that regulatory analysis should facilitate agency efforts to 
develop regulations that serve the public interest, advance statutory 
objectives, and be consistent with Executive Order 12866, Executive 
Order 13563, and the Presidential Memorandum of January 20, 2021 
(Modernizing Regulatory Review). Regulatory analysis, as practicable 
and appropriate, shall recognize distributive impacts and equity, to 
the extent permitted by law.
    Executive Order 13563 reaffirms the principles of Executive Order 
12866 while calling for improvements in the nation's regulatory system 
to promote predictability, to reduce uncertainty, and to use the best, 
most innovative, and least burdensome tools for achieving regulatory 
ends. The Executive Order directs agencies to

[[Page 90116]]

consider regulatory approaches that reduce burdens and maintain 
flexibility and freedom of choice for the public where these approaches 
are relevant, feasible, and consistent with regulatory objectives. 
Executive Order 13563 emphasizes further that agencies must base 
regulations on the best available science and the rulemaking process 
must allow for public participation and an open exchange of ideas. The 
NPS has developed this rule in a manner consistent with these 
requirements. The potential costs and benefits of this rule were 
assessed by Industrial Economics, Incorporated (IEc), on behalf of the 
NPS, in a Regulatory Impact Analysis (prepared for the proposed rule) 
and associated Memorandum (assessing the costs and benefits of the 
changes from the proposed rule in the final rule) that can be accessed 
at https://www.regulations.gov in Docket ID: NPS-2020-0003.

Regulatory Flexibility Act (RFA) and Small Business Regulatory 
Enforcement Fairness Act (SBREFA)

    The head of this agency certifies that this rule will not have a 
significant economic impact on a substantial number of small entities 
under the Regulatory Flexibility Act (5 U.S.C. 601 et seq.), as amended 
by the Small Business Regulatory Enforcement Fairness Act of 1996 
(SBREFA; 5 U.S.C. 801 et seq.). An Initial Regulatory Flexibility 
Analysis (IRFA) was prepared pursuant to the Regulatory Flexibility Act 
(RFA) and the Small Business Regulatory Enforcement Fairness Act 
(SBREFA). The analysis is available in the report prepared by 
Industrial Economics, Incorporated (IEc), on behalf of the NPS, 
entitled ``36 CFR [part] 51 Concessions Contract Revisions Regulatory 
Impact Analysis (RIA) and Initial Regulatory Flexibility Analysis 
(IRFA)'' that can be accessed at https://www.regulations.gov in Docket 
ID: NPS-2020-0003--specifically, Chapter 5 of that report. The analysis 
in the IRFA concluded that the potential impact on small concessioners 
is likely to be positive. The IRFA estimated that the majority (96%) of 
the entities that have concession contracts are small businesses and 
that this makeup is likely to be similar in the future. Furthermore, 
the IRFA conducted a qualitative analysis to determine the likely 
impacts of the rule on concessioners that focused on key changes to the 
rule related to LSI, rates and franchise fees. While the NPS lacks the 
ability to quantify the impact, the IRFA found that the impacts are 
likely to be beneficial to concessioners in general, without any 
particular bias toward small or large businesses. Since the majority of 
contracts are held by small businesses, the IRFA concluded that the 
impacts to small businesses would therefore be positive.
    The IRFA stated that, due to uncertainties associated with 
quantifying the impact on small entities, the ``potential exists for 
the proposed rule to result in a significant beneficial impact on a 
substantial number of small entities.'' Based upon a further review of 
the impacts described in the IRFA, the NPS now believes the beneficial 
impact on small entities will not be significant and will not affect a 
substantial number of small entities. This certification is based upon 
the following statements and upon the analysis contained in a 
Memorandum prepared by IEc that concludes that the small entities 
holding concession contracts that would be affected by this rule 
represent less than 0.1 percent of the small entities providing similar 
services in the United States. This Memorandum is available on https://www.regulations.gov in Docket ID: NPS-2020-0003.
    The IRFA estimated the annual transfer payments associated with 
changes in the eligibility threshold for LSI in the rule as $4.2 
million from concessioners to the NPS in increased franchise fees and 
up to $4.2 million from NPS to concessioners in the form of LSI buy 
downs for a total net financial impact of zero to the concessioner 
community. There are no changes between the proposed and final rule 
that the NPS believes would change this analysis.
    The IRFA identified that the implementation of market-based pricing 
in the rule could result in transfers of $54 million in franchise fee 
revenue from concessioners to the NPS. As stated in the IRFA, an 
increase in rates resulting from the rule, without any change in 
service or amenities, would be reflected as an increase in revenue to 
the concessioner without any increase in expense. Because the base 
franchise fee as determined using the current rate approval methods 
(without enhanced market-based pricing) already provides a reasonable 
opportunity for the concessioner, the NPS assumed in the IRFA that all 
of the additional profit would pass-through flow to the government in 
the form of the $54 million in franchise fees for a total net financial 
impact of zero to the concessioner community. There are no changes 
between the proposed and final rule that the NPS believes would change 
this analysis.
    One change was made to the final rule in response to public 
comments that required further consideration relative to potential 
impacts to the concessioner community. That change is in Sec.  51.78, 
Will a concession contract require a franchise fee and will the 
franchise fee be subject to adjustment? The final rule provides as an 
alternative, the ability for the NPS to provide in the prospectus, a 
proposed franchise fee based on the probable value determination in the 
prospectus (``prospectus franchise fee''). The Offerors may bid either 
(i) higher franchise fees or (ii) lower franchise fees in combination 
with enhanced or higher quality service offerings that exceed 
prospectus requirements. Any investment made by the concessioner to 
provide enhanced or higher quality offerings is intended to be offset 
by an adjustment in the franchise fee offered, such that the total net 
financial impact to the concession community is estimated at zero.

Congressional Review Act (CRA)

    This rule is not a major rule under 5 U.S.C. 804(2), the CRA. This 
rule:
    (a) Does not have an annual effect on the economy of $100 million 
or more.
    (b) Will not cause a major increase in costs or prices for 
consumers, individual industries, Federal, State, or local government 
agencies, or geographic regions.
    (c) Does not have significant adverse effects on competition, 
employment, investment, productivity, innovation, or the ability of 
U.S.-based enterprises to compete with foreign-based enterprises.

Unfunded Mandates Reform Act (UMRA)

    This rule does not impose an unfunded mandate on State, local, or 
Tribal governments or the private sector of more than $100 million per 
year. The rule does not have a significant or unique effect on State, 
local or Tribal governments or the private sector. This rule clarifies 
NPS procedures and does not impose requirements on other agencies or 
governments. A statement containing the information required by the 
UMRA (2 U.S.C. 1531 et seq.) is not required.

Takings (Executive Order 12630)

    This rule does not effect a taking of private property or otherwise 
have takings implications under Executive Order 12630. A takings 
implication assessment is not required.

Federalism (Executive Order 13132)

    Under the criteria in section 1 of Executive Order 13132, the rule 
does not have sufficient federalism implications to warrant the 
preparation of a federalism summary impact

[[Page 90117]]

statement. A federalism summary impact statement is not required.

Civil Justice Reform (Executive Order 12988)

    This rule complies with the requirements of Executive Order 12988. 
This rule:
    (a) Meets the criteria of section 3(a) requiring agencies to review 
all regulations to eliminate errors and ambiguity and write them to 
minimize litigation; and
    (b) Meets the criteria of section 3(b)(2) requiring agencies to 
write all regulations in clear language and contain clear legal 
standards.

Consultation With Indian Tribes (Executive Order 13175 and Department 
Policy)

    The Department of the Interior strives to strengthen its 
government-to-government relationship with Indian Tribes through a 
commitment to consultation with Indian Tribes and recognition of their 
right to self-governance and Tribal sovereignty. The NPS has evaluated 
this rule under the Department's consultation policy and under the 
criteria in Executive Order 13175, and has determined that it has no 
substantial direct effects on federally recognized Indian Tribes and 
that consultation under the Department's Tribal consultation policy is 
not required.

Paperwork Reduction Act (PRA) (44 U.S.C. 3501 et seq.)

    This rule contains no new information collections. All information 
collections require approval under the Paperwork Reduction Act of 1995 
(44 U.S.C. 3501 et seq.). The NPS may not conduct or sponsor and you 
are not required to respond to a collection of information unless it 
displays a currently valid Office of Management and Budget (OMB) 
control number.

National Environmental Policy Act (NEPA)

    This rule does not constitute a major Federal action significantly 
affecting the quality of the human environment. A detailed statement 
under NEPA is not required. The NPS has determined the rule is 
categorically excluded under 43 CFR 46.210(i) because it is 
administrative, financial, legal, and technical in nature. In addition, 
the environmental effects of this rule are too speculative to lend 
themselves to meaningful analysis. NPS decisions to enter into 
concession contracts will be subject to compliance with NEPA at the 
time the contracts are executed. The NPS has determined that the rule 
does not involve any of the extraordinary circumstances listed in 43 
CFR 46.215 that would require further analysis under NEPA.

Effects on the Energy Supply (Executive Order 13211)

    This rule is not a significant energy action under the definition 
in Executive Order 13211; although the rule is significant under 
Executive Order 12866, the rule is not likely to have a significant 
adverse effect on the supply, distribution, or use of energy, and the 
Administrator of OIRA has not otherwise designated the rule as a 
significant energy action. A Statement of Energy Effects in not 
required.

List of Subjects in 36 CFR Part 51

    Commercial services, Government contracts, National parks, Visitor 
services.

Signing Authority

    The Assistant Secretary for Fish and Wildlife and Parks has 
delegated authority to the Chief of Staff, Office of the Assistant 
Secretary for Fish and Wildlife and Parks, to electronically sign this 
document for purposes of publication in the Federal Register.
    In consideration of the foregoing, the National Park Service is 
amending 36 CFR part 51 as follows:

PART 51--CONCESSION CONTRACTS

0
1. The authority citation for part 51 is revised to read as follows:

    Authority:  54 U.S.C. 101901-101926 and title IV of the National 
Parks Omnibus Management Act of 1998 (Pub. L. 105-391).


0
2. Amend Sec.  51.4 by revising the section heading and paragraph (b) 
and adding paragraphs (c) through (h) to read as follows:


Sec.  51.4  How will the Director invite the general public to apply 
for the award of a concession contract and how will the Director 
determine when to issue a prospectus for a new concession opportunity 
where no prior concession services had been provided?

* * * * *
    (b) Except as provided under Sec.  51.47 (which calls for a final 
administrative decision on preferred offeror appeals prior to the 
selection of the best proposal) the terms, conditions and 
determinations of the prospectus and the terms and conditions of the 
proposed concession contract as described in the prospectus, including, 
without limitation, its minimum franchise fee, are not final until the 
concession contract is awarded. The Director will not issue a new 
prospectus for a concession contract earlier than eighteen months prior 
to the expiration of a related existing contract except when the 
Director determines it is necessary to provide additional time to 
potential offerors, such as when additional time is needed to avoid 
issuing a prospectus during a busy operating season or where potential 
offerors must make significant financial commitments to meet the 
requirements of the contract. This additional time should be as short 
as prudent.
    (c) The Director will issue a prospectus for a new concession 
opportunity in a park area when the Director determines, in the 
Director's discretion, that a new concession opportunity is necessary 
and appropriate for public use and enjoyment of the park area and is 
consistent to the highest practicable degree with the preservation and 
conservation of the resources and values of the park area.
    (d) The Director will establish procedures to solicit and consider 
suggestions for new concession opportunities within park areas from the 
public (including from potential concessioners) through the National 
Park Service's planning processes for such opportunities as well as 
through annual invitations for proposals for improving visitor 
experiences through third-party providers. The Director shall fully 
review all proposals received, provide a written evaluation for each 
proposal, and make all proposals and completed evaluations available to 
the public.
    (e) In determining whether to issue a prospectus for a concession 
contract to provide such new concession opportunities, the Director 
will consider relevant factors including whether the suggested 
concession opportunities are adequately provided within the park area 
by other authorized commercial providers; the potential for augmented 
resources for park area operations; the effects of the suggested 
concession operations on the park area; the long-term viability of the 
suggested concession opportunities; the innovative quality of the 
suggestions; and the potential impacts on park area visitation and on 
communities located near the park area.
    (f) No preference to a concession contract shall be granted to a 
party based on that party's having submitted a proposal for a new 
concession opportunity described in this section. The Director, 
however, may award a contract noncompetitively to such a party when 
determined appropriate as described in Sec.  51.25.
    (g) The Director may consider suggestions for new services as

[[Page 90118]]

additional services to be provided through an existing concession 
contract as described in Sec.  51.76.
    (h) Nothing in this section shall constrain the discretion of the 
Director to solicit or consider suggestions for new concession 
opportunities or collect other information that can be used by the 
Director in connection with a new concession opportunity.

0
3. Revise Sec.  51.8 to read as follows:


Sec.  51.8  Where will the Director publish the notice of availability 
of the prospectus?

    The Director will publish notice of the availability of the 
prospectus at least once in the System for Award Management (SAM) where 
Federal business opportunities are electronically posted, or in a 
similar publication if this site ceases to be used. The Director, if 
determined appropriate, may also publish notices electronically on 
websites including social media and in local or national newspapers or 
trade magazines.

0
4. Amend Sec.  51.16 by revising paragraph (a) to read as follows:


Sec.  51.16  How will the Director evaluate proposals and select the 
best one?

    (a) The Director will apply the selection factors set forth in 
Sec.  51.17 by assessing each timely proposal under each of the 
selection factors on the basis of a narrative explanation, discussing 
any subfactors when applicable. For each selection factor, the Director 
will assign a score that reflects the determined merits of the proposal 
under the applicable selection factor and in comparison to the other 
proposals received, if any. The maximum aggregate score available for 
all selection factors will be 40 points, and every selection factor 
used must have a maximum score of one point or higher. Each selection 
factor will be scored as identified in the prospectus, subject to the 
following criteria:
    (1) The maximum score assignable for the principal selection factor 
described in Sec.  51.17(a)(5) will be less than the lowest maximum 
score of the other principal selection factors described in Sec.  
51.17(a) with a score of one point for agreeing to the prospectus 
franchise fee (as defined in Sec.  51.78) or, when the Director 
determines appropriate, the minimum acceptable franchise fee set forth 
in the prospectus.
    (2) The maximum score assignable for the secondary selection factor 
set forth in Sec.  51.17(b)(1) will be less than the maximum score for 
the principal selection factor described in Sec.  51.17(a)(5); and,
    (3) The maximum scores assignable for any additional secondary 
selection factors set forth in Sec.  51.17(b) will be such that the 
maximum aggregate score assignable for all additional secondary 
selection factors will be less than the maximum score for the principal 
selection factor described in Sec.  51.17(a)(5).
* * * * *

0
5. Amend Sec.  51.17 by revising paragraph (b)(2) to read as follows:


Sec.  51.17  What are the selection factors?

* * * * *
    (b) * * *
    (2) Any other selection factors the Director may adopt in 
furtherance of the purposes of this part, including, where appropriate 
and otherwise permitted by law, the extent to which a proposal calls 
for the employment of Indians (including Native Alaskans) and/or 
involvement of businesses owned by Indians, Indian Tribes, Native 
Alaskans, or minority or women-owned businesses in operations under the 
proposed concession contract. When appropriate, the Director will 
include a secondary selection factor requesting suggestions for new 
services.
* * * * *

0
6. Amend Sec.  51.51 by:
0
a. Removing the word ``solely'' from the term ``Leasehold surrender 
interest solely''; and
0
b. Revising the definition of the term ``Major rehabilitation''.
    The revision reads as follows:


Sec.  51.51  What special terms must I know to understand leasehold 
surrender interest?

* * * * *
    Major rehabilitation means a planned rehabilitation of an existing 
structure that the Director determines:
    (1) The construction cost of which exceeds thirty percent of the 
pre-rehabilitation value of the structure; and
    (2) Improves visitor health, safety, and enjoyment or the health 
and safety of concessioner employees and will either enhance the 
property's overall value, prolong its useful life, or adapt it to new 
uses.
* * * * *

0
7. Revise Sec.  51.73 to read as follows:


Sec.  51.73  What is the term of a concession contract?

    (a) A concession contract will generally be awarded for a term of 
10 years or less and may not have a term of more than 20 years (unless 
extended in accordance with this part). The Director will issue a 
contract with a term longer than 10 years when the Director determines 
that the contract terms and conditions, including but not limited to 
the required construction of capital improvements or other potential 
investments related to providing required services, warrant a longer 
term. It is the policy of the Director under these requirements that 
the term of concession contracts should take into account the financial 
requirements of the concession contract, resource protection, visitor 
needs, and other factors the Director may deem appropriate.
    (b) The Director may include in a concession contract, as 
advertised in the applicable prospectus, an optional term or terms in 
increments of at least one year and not to exceed three years in total, 
where the total term of the contract, including all optional terms, 
does not exceed 20 years. The Director shall specify in the contract 
the performance criteria (including evaluation ratings) the 
concessioner must meet to be eligible to exercise such option term or 
terms. Such contract also shall provide that the concessioner may 
exercise an optional term or terms only if the Director determines that 
the concessioner has met the performance criteria defined in the 
contract.
    (c) When the Director determines, in his or her sole discretion, 
that a substantial interruption of or change to operations due to 
natural events or other reasons outside the control of the 
concessioner, including but not limited to government-ordered 
interruptions, warrants lengthening the original term of a concession 
contract, the Director and the concessioner may amend the contract to 
add the amount of time to the term of the contract deemed appropriate 
by the Director, which in no case may be longer than three years and 
where the total term of the contract, including any added time, may not 
exceed 20 years.

0
8. Revise Sec.  51.76 to read as follows:


Sec.  51.76  May the Director amend a concession contract to provide 
new or additional visitor services or grant a concessioner a 
preferential right to provide new or additional visitor services?

    (a) The Director may provide for new or additional services under 
the annual operating plan of the concessioner or through a contract 
amendment, as appropriate, where the Director determines the new or 
additional services are necessary and appropriate for public use and 
enjoyment of the park area in which they are located. New or additional 
services must be consistent to the highest practicable degree with the 
preservation and conservation of the resources and values of the park 
area. Such new or additional services shall not represent a material 
change to the required and authorized services as set

[[Page 90119]]

forth in the applicable prospectus or contract. Changes may include, 
but are not limited to, extensions of seasons, operating hours and 
increases in capacity limitations.
    (b) When considering whether to amend the applicable terms of an 
existing concession contract to provide new or additional services, the 
Director should consider the benefit to the visitor experience where 
other concessioners or holders of commercial use authorizations in the 
same park area already provide those services.
    (c) A concessioner that is allocated park area entrance, user days 
or similar resource use allocations for the purposes of a concession 
contract will not obtain any contractual or other rights to 
continuation of a particular allocation level pursuant to the terms of 
a concession contract or otherwise. Such allocations will be made, 
withdrawn and/or adjusted by the Director from time to time in 
furtherance of the purposes of this part.

0
9. Revise Sec.  51.78 to read as follows:


Sec.  51.78  Will a concession contract require a franchise fee and 
will the franchise fee be subject to adjustment?

    (a) Concession contracts will provide for payment to the government 
of a franchise fee or other monetary consideration as determined by the 
Director upon consideration of the probable value to the concessioner 
of the privileges granted by the contract involved. This probable value 
will be based upon a reasonable opportunity for net profit in relation 
to capital invested, including any funds required to be placed in 
special accounts identified in Sec.  51.81, and the obligations of the 
contract as described in the prospectus.
    (b) Each prospectus shall include one of the following:
    (1) A proposed franchise fee based on the probable value 
determination in the prospectus (``prospectus franchise fee''). The 
prospectus franchise fee should be set at a level to encourage 
competition for the concession opportunity through offers of either:
    (i) Higher franchise fees; or
    (ii) Lower franchise fees in combination with enhanced or higher 
quality service offerings that exceed prospectus requirements.
    (2) Alternatively, when the Director determines that using a 
prospectus franchise fee is inappropriate for the particular concession 
opportunity, a minimum acceptable franchise fee based on the probable 
value determination and set at a level to encourage competition.
    (c) In determining the minimum acceptable franchise fee or 
prospectus franchise fee to include in a prospectus, the Director shall 
use relevant industry data for similar operations (e.g., hospitality, 
recreation) and provide in the prospectus the basis for the 
determination of the minimum acceptable franchise fee or prospectus 
franchise fee. Consideration of revenue to the United States shall be 
subordinate to the objectives of protecting and preserving park areas 
and of providing necessary and appropriate services for public use and 
enjoyment of the park area in which they are located at reasonable 
rates.
    (d) The franchise fee contained in a concession contract with a 
term of 5 years or less may not be adjusted during the term of the 
contract. Concession contracts with a term of more than 5 years will 
contain a provision that provides for adjustment of the contract's 
established franchise fee at the request of the concessioner or the 
Director. An adjustment will occur if the concessioner and the Director 
mutually determine that extraordinary, unanticipated changes occurred 
after the effective date of the contract that have affected or will 
significantly affect the probable value of the privileges granted by 
the contract. The concession contract will provide for arbitration if 
the Director and a concessioner cannot agree upon an appropriate 
adjustment to the franchise fee that reflects the extraordinary, 
unanticipated changes determined by the concessioner and the Director.

0
10. Amend Sec.  51.81 by revising paragraph (b) to read as follows:


Sec.  51.81  May the Director include ``special account'' provisions in 
concession contracts?

* * * * *
    (b) Concession contracts may contain provisions that require the 
concessioner to set aside a percentage of its gross receipts or other 
funds in a component renewal reserve to be used at the direction of the 
Director solely for renewal of real property components located in park 
areas and utilized by the concessioner in its operations. The 
anticipated timing and estimated costs of component renewal projects 
should be identified in the prospectus. Component renewal reserve funds 
may not be expended to construct real property improvements, including, 
without limitation, capital improvements. Component renewal reserve 
provisions may not be included in concession contracts in lieu of a 
franchise fee, and funds from these reserves will be expended only for 
the renewal of real property components as identified in the contract 
and assigned to the concessioner by the Director for use in its 
operations. The component renewal reserve provides a mechanism for a 
concessioner to reserve monies to fund component renewal projects. 
Concessioner obligations to maintain assigned concession facilities 
including component renewal are not limited to the monies in the 
component renewal reserve.
* * * * *

0
11. Amend Sec.  51.82 by revising paragraph (b) and adding paragraphs 
(c) and (d) to read as follows:


Sec.  51.82  Are a concessioner's rates required to be reasonable and 
subject to approval by the Director?

* * * * *
    (b) The Director shall approve rates and charges that are 
reasonable and appropriate in a manner that is as prompt and as 
unburdensome to the concessioner as possible and that relies on market 
forces to establish the reasonableness of such rates and charges to the 
maximum extent practicable. Unless otherwise provided in the concession 
contract, the reasonableness and appropriateness of rates and charges 
shall be determined primarily by comparison with those rates and 
changes 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 Director: length of 
season; peakloads; average percentage of occupancy; accessibility; 
availability and cost of labor; and types of patronage.
    (c) The Director shall identify the rate approval method to be used 
for each category of facilities, goods, and services to be provided 
when preparing the prospectus for a concession contract. The Director 
will use the least burdensome and most market-based comparability 
method. Unless the Director determines that market forces are not 
sufficient to determine reasonable and appropriate rates, the Director 
shall make a competitive market declaration as the means of 
comparability, and rates and charges will be approved based upon what 
the concessioner determines the market will bear. Other rate approval 
methods will be used only when the Director determines that market 
forces are inadequate to establish the reasonableness of rates and 
charges for the facilities, goods, or services. The Director will 
monitor rates and charges and competition and may change the rate 
approval method during the term of the contract to reflect changes in 
market conditions.

[[Page 90120]]

    (d) Each contract shall include a schedule for rate requests and 
describe the information necessary to include in a complete rate 
request. Upon receipt of a request for a change in rates or charges the 
Director shall, as soon as practicable but not more than 20 days of 
receipt of the request, provide the concessioner with a written 
determination that the request is complete, or where the Director 
determines the request incomplete, a description of the information 
required for the request to be determined complete. Where changes in 
rates and charges have been requested and the request has been deemed 
complete, concessioners shall be allowed to notify visitors making 
reservations 90 or more days in advance of the anticipated rates. Those 
rates are subject to adjustment prior to the visit based upon the 
Director's review and final decision about the requested rate change . 
The Director shall issue a final decision approving or rejecting a 
request by a concessioner to change rates and charges to the public 
within 10 days of receipt of a complete request in accordance with the 
conditions described in the contract, except for those change requests 
requiring a full comparability study, for which the Director shall 
issue a decision as soon as possible and in no event longer than 30 
days after receipt of the complete request. If the Director does not 
approve of the rates and charges proposed by the concessioner, the 
Director must provide in writing the substantive basis for any 
disapproval. These timeframes will be exceeded only in extraordinary 
circumstances and the concessioner must be notified in writing of such 
circumstances. If the Director fails to meet the timeframes described 
above, and has not notified the concessioner in writing of the 
existence of extraordinary circumstances justifying delay, a 
concessioner may implement the requested change to rates and charges 
until the Director issues a final written decision. If the Director 
denies the requested change to rates and charges after implementation 
by the concessioner, the Director will not require the concessioner to 
retroactively adjust any rates or charges for services booked prior to 
the Director's denial.

Maureen Foster,
Chief of Staff, Office of the Assistant Secretary for Fish and Wildlife 
and Parks.
[FR Doc. 2023-28659 Filed 12-28-23; 8:45 am]
BILLING CODE 4312-51-P