Detailed Information on the
National Park Service - Concessions Management Assessment

Update the FCI for concession managed-assets based on comprehensive condition assessments by the end of FY 08

Conduct benchmark studies of franchise fees attained by similar governmental programs to determine appropriateness of franchise fee goals.

Systematic use of visitor surveys to evaluate concessioners and improve program performance thru the standards, evaluation and rate approval program.

Provide an annual account of concession information, e.g. use of special account funds, and franchise fee payments.

Track expenditures of 80 percent franchise fees by expense category, e.g., visitor services, maintenance and repair.

Demonstrate how NPS uses performance data to improve management, adjust program priorities, or allocate resources.

Demonstrate how NPS holds superintendents and other managers responsible for achieving program results.

Measure: Percent of park visitors that are satisfied with recreational commercial services in the parks.

Explanation:Average result of annual visitor survey card (VSC) surveys.

Measure: Percent of park facilities occupied by concessioners with completed annual condition assessments

Explanation:NPS has 4,504 facilities used by concessioners. Annual condition assessments are needed to set FCI baseline.

Measure: Percent of park facilities occupied by concessioners with completed comprehensive condition assessments.

Explanation:NPS has 4,504 facilities used by concessioners. Comprehensive condition assessments done prior to issuing contract prospectus.

Measure: Condition assessment costs per square foot (buildings only)

Explanation:Change in scope of assessments resulted in increased costs. Future assessments will be more complex, so the goal is to maintain current cost levels.

Measure: Condition of park facilities occupied by concessioners, as measured by a Facility Condition Index (FCI).

Explanation:NPS has 4,504 facilities used by concessioners. Lower FCI scores mean better condition.

Measure: Environmental Compliance - Percent of park concession operations with baseline environmental audits.

Explanation:Measures NPS progress in monitoring the environmental impact on park resources from concession operations.

Measure: Percent of contracts operating under extensions

Explanation:Goal is to reduce the backlog of contracts not yet issued under the 1998 Act.

Measure: Return to the Government - Fees collected from concessions as a percent of gross concessions revenues

Explanation:Concessioners pay a fee for the right to operate businesses in national parks

Is the program purpose clear?

Explanation: Purpose of the concessions program is to provide the food, lodging, and retail services within parks that are necessary and appropriate for the public use and enjoyment of national parks. Since its establishment in 1916, NPS has been authorized to "grant privileges . . . for the use of land for the accommodation of visitors in the various parks".

Evidence: NPS Organic Act (1916). Concessions Policies Act (1965). NPS Omnibus Management Act (1998).

Does the program address a specific and existing problem, interest, or need?

Explanation: Need is to provide food, lodging, and related services within national parks that allow visitors to enjoy the park without causing damage to park resources.

Evidence: NPS Organic Act (1916). Concessions Policies Act (1965). NPS Omnibus Management Act (1998). Commercial service plans identify visitor service requirements for each park.

Is the program designed so that it is not redundant or duplicative of any other Federal, state, local or private effort?

Explanation: This program, including its concession contractors, has sole responsibility for providing food, lodging and retail services within national parks. Although increasingly these services are also provided by the private sector in the "gateway communities" outside of national parks, most larger parks still require services closer to destination sites. In addition, many historic concession assets (e.g., Old Faithful Inn) have taken on an historic significance of their own that is just as important as the service provided.

Evidence: NPS Omnibus Management Act (1998). Commercial service plans must determine the services provided via concession contract are necessary and appropriate and not duplicative of commercial activities located in gateway communities. Similar services may be available outside park boundaries, but it is unlikely they provide services with the same level of historical significance.

Is the program design free of major flaws that would limit the program's effectiveness or efficiency?

Explanation: Major design flaws were corrected with the National Parks Omnibus Act of 1998, which allowed increased competition for concession contracts by repealing a concessioner's right of first refusal for a new contract. It also clarified how to determine a concessioner's interest in improvements that it made to park facilities. More work is needed, however, to implement contracts under this new authority.

Evidence: NPS Omnibus Management Act (1998). PricewaterhouseCoopers (PwC) Executive Summary (2001). NPS Concession Advisory Board, created under the 1998 Act, provides additional oversight and input from outside reviewers on the program's performance.

Is the program design effectively targeted so that resources will address the program's purpose directly and will reach intended beneficiaries?

Explanation: NPS relies on private-sector concession operators to provide food, lodging and retail services to park visitors. The hospitality industry is best suited to target resources to the right beneficiaries. PwC and the Advisory Board help to reinforce program oversight. Program is increasing competition through the use of IDIQ contracts and enforcement of authorized limits on right of preference. NPS, however, needs better oversight of how concessioners maintain the park facilities they use.

Evidence: PwC support contract. Concessions Advisory Board recommendations. IDIQ prospectus development. NPS Director's memo on concession asset portfolio management (5/03/05).

Does the program have a limited number of specific long-term performance measures that focus on outcomes and meaningfully reflect the purpose of the program?

Explanation: Long-term measures focus on three basic outcomes: (1) visitor satisfaction; (2) return to the government; and (3) impact on park resources, including facilities and the environment. The first two measures are established, but more work is needed on the third.

Evidence: Visitor satisfaction is measured through visitor survey cards. Return to the government is measured by franchise fees as a percent of concessioners annual gross revenue. Impact on park resources is measured through environmental audits and facility condition assessments.

Does the program have ambitious targets and timeframes for its long-term measures?

Explanation: NPS has established targets for all long-term measures. Targets could be more ambitious, but progress is tied to contract renewal. Performance is expected to increase with the awarding of new concession contracts under the 1998 Act. Targets for return to the government appear too low.

Evidence: Visitor survey card summaries. Environmental audit summaries. Report on franchise fee collections. See GAO audit on concessions management (2005) regarding inadequate return to the government. NPS GPRA performance plan (2005).

Does the program have a limited number of specific annual performance measures that can demonstrate progress toward achieving the program's long-term goals?

Explanation: Annual measures directly support the long-term goals listed above. NPS has goals for condition assessments, environmental compliance, and completed contract renewals. NPS needs better annual measures to track progress in establishing FCI measure for park assets used by concessioners.

Evidence: Visitor survey card summaries. Environmental audit summaries. Report on franchise fee collections. See GAO 2005 audit on the need to set performance goals for tracking the value of concessioner capital improvements.

Does the program have baselines and ambitious targets for its annual measures?

Explanation: NPS has established adequate targets for annual measures. Although targets could be more ambitious, progress is tied to contract renewal. Performance is expected to increase with the awarding of new concession contracts under the 1998 Act. The program intends to reduce the percent of contracts operating under extensions to 5% by the end of FY07.

Evidence: Visitor survey card summaries. Environmental audit summaries. Report on franchise fee collections. Three-year workplan on contract renewals (6/08/05). NPS GPRA performance plan (2005). See GAO 2005 audit on the need to set performance goals for tracking the value of concessioner capital improvements.

Do all partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) commit to and work toward the annual and/or long-term goals of the program?

Explanation: Standard contract language directly links concession activities and program goals (e.g., shortening contract terms if capital improvements are not completed on time). Program is working with concessioners on an electronic process for annual financial reports. Within NPS, the concessions and facility management programs are coordinating work on condition assessments and reporting for concession facilities.

Evidence: PwC was retained to provide business expertise, in response to concerns that "concessions contracting practices are out-of-date and do not reflect the best practices" (GAO, 2000). Since then, the program has established regulations and developed standard contract language that follows best contracting practices. NPS Director's memo on concession asset portfolio management (5/03/05). Standard concessions contract (5/4/00 Federal Register).

Are independent evaluations of sufficient scope and quality conducted on a regular basis or as needed to support program improvements and evaluate effectiveness and relevance to the problem, interest, or need?

Explanation: In recent years, the concession program has been the subject of many independent audits and evaluations by the GAO and DOI Inspector General. It also contracted in 2001 with Pricewaterhouse Coopers to conduct an overall program review. Finally, the Concessions Advisory Board (established in the 1998 Act) provides independent recommendations on how to align concession policies with 'best practices' of the hospitality industry.

Evidence: PricewaterhouseCoopers (PWC) program review (2001). Concession Advisory Board recommendations summary (2005). GAO reports on Interior Management Challenges (2003), problems that plague the concessions program (2000), and concessions reform (1998 testimony). DOI IG audits on concessions management (2005), franchise fees (2003), concessioner special accounts (2002), concession contracting (1999), and concessioner improvement accounts (1998).

Are Budget requests explicitly tied to accomplishment of the annual and long-term performance goals, and are the resource needs presented in a complete and transparent manner in the program's budget?

Explanation: NPS lacks effective budgeting that defines the link between performance targets and budget resources. Although budget justifications cite performance goals,they do not make clear the impact of funding decisions on expected performance. Nor does NPS report all the direct and indirect costs needed to attain results. This is particularly the case with activities funded through mandatory accounts, such as franchise fees and concession improvement accounts.

Evidence: NPS 2006 Budget justifications.

Has the program taken meaningful steps to correct its strategic planning deficiencies?

Explanation: Steps to correct strategic planning deficiencies include: (1) conducting condition assessments on park facilities used by concessioners; (2) preparing a measure on the condition of those facilities; (3) measuring the impact on park resources through environmental audits; and (4) establishing a Standards, Evaluations, and Rate Approval (SERA) working group to update NPS procedures for approving the rates charged by concessioners to the public.

Evidence: SERA briefing statement (2005). Concessions Environmental Audit Schedule (CEAS) baseline (2005). Scope of work for standard condition assessments (2004). Report on seven major industry standard assets for concessions (6/08/05). NPS Director's memo on concession asset portfolio management (5/03/05).

Does the agency regularly collect timely and credible performance information, including information from key program partners, and use it to manage the program and improve performance?

Explanation: DOI's IG reported in 2005 that it was "unable to obtain a timely or complete database of concessions information." PWC noted in 2001 that the program is "significantly hindered" by the lack of accurate and timely information and efforts to solve this "appear to be appropriate in intent, but inefficient in execution." This appears to be improving, but NPS has not yet demonstrated that managers are using performance data to manage the program overall. The concessions program states that it will soon have a database available to manage and track concessioner information on a servicewide basis.

Evidence: DOI IG audit (2005). GAO report (2000; 2003). PWC Executive Summary (2001). Annual Financial Report (AFR) summary (2004). Three-year workplan on contract renewals (6/08/05).

Are Federal managers and program partners (including grantees, sub-grantees, contractors, cost-sharing partners, and other government partners) held accountable for cost, schedule and performance results?

Explanation: GAO noted in 2000 that "superintendents are not being evaluated on the results of their concessions program." It followed up in 2003 by noting "the lack of accountability within the [NPS] concessions program." DOI's IG recommended that "it is imperative that [DOI] take the lead in implementing an effective concessions program", noting that the current "disjointed approach has failed to establish accountability and oversight within [DOI], perpetuating poor business practices." Both GAO and the IG cite inadequate management support, particularly in human capital issues, such as better recruiting of concession program staff with needed business skills.

Evidence: DOI IG audit (2005). GAO report (2000; 2003). PWC report (2001). The 2000 GAO report also noted that "the head of the program -- the Chief of Concessions -- has no direct authority over those that implement the program in individual park units." NPS plans to reorganize headquarters responsibilities may help. GAO in 2003 raised concerns about "inadequate qualifications" of concession staff, which the IG reiterated in 2005.

Are funds (Federal and partners') obligated in a timely manner and spent for the intended purpose?

Explanation: The program does not have the capability to determine if funds from franchise fees or concession improvement accounts are obligated in a timely manner or spent for the intended purpose. These funds are tracked at the park level, with inadequate guidance and reporting requirements. Requests for information are done on an ad hoc basis, and the program lacks the capability -- or the support from the NPS accounting office -- to track expenditures and compare actual against intended uses. As the 2005 IG report recommends, DOI needs to "develop and implement an integrated management information system for maintaining and reporting concessions data." The concessions program states that it will soon have a database available to manage and track concessioner information on a servicewide basis.

Evidence: DOI IG audit (2005). GAO report (2000; 2003). PWC Executive Summary (2001). DOI IG reports on franchise fees (2003), concessioner special accounts (2002), and concessioner improvement accounts (1998). NPS FY04 audit also raised concerns about special improvement accounts. The program provided some financial information, but it was not timely, comprehensive, or organized in a manner to be used in making program-level management decisions. Project charter for new Concessions Data Management System (2005).

Does the program have procedures (e.g. competitive sourcing/cost comparisons, IT improvements, appropriate incentives) to measure and achieve efficiencies and cost effectiveness in program execution?

Explanation: The program itself is a form of contracting out. It oversees 600+ contracts with private-sector businesses that provide park visitors with services that range from very large lodging, food and beverage operations to gas stations, firewood sales, horseback rides, and canoeing trips. The program awards contracts through a competitive process, resulting in increased efficiency and overall better performance. The 1998 Act removed major design flaws that hindered competitive awards, and NPS is slowly but surely issuing contracts through a more competitive process. NPS still needs to benchmark itself more against other similar programs, particularly regarding its return from contracts.

Evidence: NPS Omnibus Management Act (1998). Standard concession contract (2000). Environmental audit tracking report. Efficiency measures show the costs for condition assessments are going up, but this reflects changing requirements. The program plans to use efficiency gains to hold costs down to current levels, even with the growing complexity of assessments and the rising cost estimates from assessment contractors.

Does the program collaborate and coordinate effectively with related programs?

Explanation: NPS concessions has improved its relations with concessioners and its coordination with other NPS programs, particularly facility management and public health. It also has meaningful collaboration with FEMA, EPA, and Northern Arizona University (NAU), which works with NPS on a hospitality management certification program. In contrast, other parts of NPS -- particularly accounting -- need to improve their support of concessions management activities. DOI also needs to develop a coordinated approach to concessions management across bureaus. As the 2005 IG audit noted, DOI "has not focused sufficient attention or taken an active role in concessions management" and "inadequate oversight . . . puts [DOI] at risk."

Evidence: NPS Director's memo on concession asset portfolio management (5/03/05). Coordination with NPS facility management on FMSS. NPS Office of Public Health directorate on visitor and resource protection (2004). NPS-EPA MOU (3/13/03). NPS-NAU MOU on Concessions Management Hospitality Certification Program (2001). NPS-DOE agreement on training (xxxx). IG audit on conessions management (2005).

Does the program use strong financial management practices?

Explanation: NPS has "several weaknesses" in its financial management systems and has reportable conditions on its financial report controls, according to its FY04 audit. The auditors also raised concerns with how NPS oversees its concession improvement accounts, which have been the subject of many IG and GAO reports. As noted in question 3.3, the program does not have the capability to track expenditures of franchise fees. As for the collection of these fees, the IG found in 2005 "poor business practices in the areas of revenue collection and inspections." Finally, PWC noted that "no annual strategic planning existing for the high grossing contracts", which is needed to manage concessioner financial interests in park facilities.

Evidence: PWC Executive Summary (2001). GAO reports and testimony (2003, 2000, 1998). DOI IG audits on concessions management (2005), franchise fees (2003), concessioner special accounts (2002), concession contracting (1999), and concessioner improvement accounts (1998). The 2002 IG report cited "weaknesses in NPS oversight" of special accounts, while the 2003 IG report concluded that "improvements were needed over the collection and deposit of franchise fees."

Has the program taken meaningful steps to address its management deficiencies?

Explanation: NPS is reorganizing its headquarters to provide better oversight of business activities such as concessions. NPS has also reduced its backlog of concessions contracts, developed standard contract language, started condition assessments, initiated a review of its rate-approval process, increased training for superintendents, and begun work to collect annual financial report data electronically.

Evidence: Standard concessions contract (2000). NPS Director's memo on concession asset portfolio management (5/03/05). SERA briefing statement (2005). Annual Financial Report (AFR) summary (2004). Three-year workplan on contract renewals (6/08/05). Project charter for new Concessions Data Management System (2005).

Has the program demonstrated adequate progress in achieving its long-term performance goals?

Explanation: Visitor satisfaction levels for concessions services remain the lowest for any NPS program, although they have increased slightly in recent years. As for financial returns, the IG 2005 audit stated that DOI "is not receiving a fair return in its concessions program." NPS has made some progress in measuring the impact on park resources through facility condition assessments and environmental audits, but results remain unclear.

Evidence: DOI IG audit (2005). GAO report (2000; 2003). Visitor satisfaction levels for concession services have improved slightly (from 70% in FY99 to 75% in FY04), but NPS has not demonstrated that this was due to any concerted plan on its part or that it has a plan for acheiving future improvements. The 2005 IG audit noted that DOI is "receiving a very low rate of return in comparison to other federal and state agencies operating concession programs."

Does the program (including program partners) achieve its annual performance goals?

Explanation: NPS has reduced the percent of contracts operating under extensions, but still has many major contracts that have not been awarded through the reformed procedures of the 1998 Act. NPS is conducting comprehensive condition assessments whenever it issues a prospectus for a new contract, but the process for assessing concessions assets remains far behind that for other park assets.

Evidence: Three-year workplan on contract renewals (6/08/05). Report on seven major industry standard assets for concessions (6/08/05). NPS Director's memo on concession asset portfolio management (5/03/05).

Does the program demonstrate improved efficiencies or cost effectiveness in achieving program goals each year?

Explanation: The NPS concessions program has certainly improved efficiencies since the 1998 Act and since it hired PricewaterhouseCoopers (PwC) in 2000-01 to conduct a 'gap analysis" and propose recommendations. Between the new statutory authority and management changes, NPS has increased the portion of contracts awarded competitively. After a slow start immediately after the 1998 Act, the program has begun to reduce the time required to complete a contract prospectus, appraisal, and facility condition assessments. Environmental audits are also declining in cost. NPS still needs better benchmarks to compare itself against other similiar programs to determine how efficiently it operates.

Evidence: PWC Executive Summary (2001). NPS Omnibus Management Act (1998). GAO reports on Interior Management Challenges (2003). DOI IG audits on concessions management (2005). NPS GPRA performance plan (2005). MOU with Volpe to improve evaluation of transportation-related prospectuses (2005). Concession Environmental Audit Schedule (CEAS) baseline audit.

Does the performance of this program compare favorably to other programs, including government, private, etc., with similar purpose and goals?

Explanation: Visitor satisfaction for concessions services compares unfavorably to other NPS programs. As for a return to the government, IG and GAO reports say that NPS concessions compares unfavorably to other state and Federal programs. As for managing assets, the concessions program is further behind other NPS programs. In its defense, NPS concessions are more complex than any other public organization (outside of DOD) that oversees private business activities on public lands. NPS needs to conduct more benchmark comparisons, such as its proposed new process for approving concessioner rates by comparing concessioners to private-sector performance standards.

Evidence: PWC Executive Summary (2001). GAO reports on Interior Management Challenges (2003), problems that plague the concessions program (2000), and concessions reform (1998 testimony). DOI IG audits on concessions management (2005), franchise fees (2003), concessioner special accounts (2002), concession contracting (1999), and concessioner improvement accounts (1998). SERA briefing statement. DOI Environmental Achievement Award (2004).

Do independent evaluations of sufficient scope and quality indicate that the program is effective and achieving results?

Explanation: Multiple independent audits have argued that the program is not effective and achieving results. As recently as 2005, an IG audit criticized DOI for not focusing sufficient attention or taking an active role in concessions management. That same report said "its concession program is ineffective and does not follow sound business principles and practices". NPS has begun to implement a number of improvements, but they have not yet translated into demonstrable results.

Evidence: PWC Executive Summary (2001). GAO reports on Interior Management Challenges (2003), problems that plague the concessions program (2000), and concessions reform (1998 testimony). DOI IG audits on concessions management (2005), franchise fees (2003), concessioner special accounts (2002), concession contracting (1999), and concessioner improvement accounts (1998).