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[Senate Hearing 109-150]
[From the U.S. Government Publishing Office]

                                                        S. Hrg. 109-150
 
                      NPS OPERATION AND MANAGEMENT

=======================================================================

                                HEARING

                               before the

                     SUBCOMMITTEE ON NATIONAL PARKS

                                 of the

                              COMMITTEE ON
                      ENERGY AND NATURAL RESOURCES
                          UNITED STATES SENATE

                       ONE HUNDRED NINTH CONGRESS

                             FIRST SESSION

                                   TO

       REVIEW THE NATIONAL PARK SERVICE'S BUSINESS STRATEGY FOR 
         OPERATION AND MANAGEMENT OF THE NATIONAL PARK SYSTEM, 
  INCLUDING DEVELOPMENT AND IMPLEMENTATION OF BUSINESS PLANS, USE OF 
BUSINESS CONSULTANTS, AND INCORPORATING BUSINESS PRACTICES INTO DAY-TO-
                             DAY OPERATIONS

                               __________

                             JULY 14, 2005

                       Printed for the use of the
               Committee on Energy and Natural Resources

                                 ______

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23-861                      WASHINGTON : 2005
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               COMMITTEE ON ENERGY AND NATURAL RESOURCES

                 PETE V. DOMENICI, New Mexico, Chairman
LARRY E. CRAIG, Idaho                JEFF BINGAMAN, New Mexico
CRAIG THOMAS, Wyoming                DANIEL K. AKAKA, Hawaii
LAMAR ALEXANDER, Tennessee           BYRON L. DORGAN, North Dakota
LISA MURKOWSKI, Alaska               RON WYDEN, Oregon
RICHARD M. BURR, North Carolina,     TIM JOHNSON, South Dakota
MEL MARTINEZ, Florida                MARY L. LANDRIEU, Louisiana
JAMES M. TALENT, Missouri            DIANNE FEINSTEIN, California
CONRAD BURNS, Montana                MARIA CANTWELL, Washington
GEORGE ALLEN, Virginia               JON S. CORZINE, New Jersey
GORDON SMITH, Oregon                 KEN SALAZAR, Colorado
JIM BUNNING, Kentucky

                       Alex Flint, Staff Director
                   Judith K. Pensabene, Chief Counsel
               Robert M. Simon, Democratic Staff Director
                Sam E. Fowler, Democratic Chief Counsel
                                 ------                                

                     Subcommittee on National Parks

                    CRAIG THOMAS, Wyoming, Chairman
               LAMAR ALEXANDER, Tennessee, Vice Chairman

GEORGE ALLEN, Virginia               DANIEL K. AKAKA, Hawaii
RICHARD M. BURR, North Carolina      RON WYDEN, Oregon
MEL MARTINEZ, Florida                MARY L. LANDRIEU, Louisiana
GORDON SMITH, Oregon                 JON S. CORZINE, New Jersey
                                     KEN SALAZAR, Colorado

   Pete V. Domenici and Jeff Bingaman are Ex Officio Members of the 
                              Subcommittee

                Thomas Lillie, Professional Staff Member
                David Brooks, Democratic Senior Counsel

                            C O N T E N T S

                              ----------                              

                               STATEMENTS

                                                                   Page

Baekey, Geoffrey A., Senior Manager, PricewaterhouseCoopers......    15
Hagood, Reginald, Senior Vice President for Strategic Initiatives 
  and Business Development, Student Conservation Association.....    13
Kiernan, Thomas C., President, National Parks Conservation 
  Association....................................................     7
Sheaffer, Bruce, Comptroller, National Park Service, Department 
  of the Interior................................................     2
Thomas, Hon. Craig, U.S. Senator from Wyoming....................     1

                                APPENDIX

Responses to additional questions................................    29

                      NPS OPERATION AND MANAGEMENT

                              ----------                              

                        THURSDAY, JULY 14, 2005

                               U.S. Senate,
                    Subcommittee on National Parks,
                 Committee on Energy and Natural Resources,
                                                    Washington, DC.
    The committee met, pursuant to notice, at 2:20 p.m., in 
room SD-366, Dirksen Senate Office Building, Hon. Craig Thomas 
presiding.

            OPENING STATEMENT OF HON. CRAIG THOMAS, 
                   U.S. SENATOR FROM WYOMING

    Senator Thomas. We will go ahead and get started. As I 
mentioned to the witnesses, we're a little mixed up today on 
time, and we're going to have some votes, I think, at 3 
o'clock. Then, at least according to the schedule, about 3:15 
we're supposed to have our first meeting of the conference 
committee on energy, and whether that will happen or not, I 
don't know. But in any event, we certainly want to hear from 
the witnesses, and so we are starting a little early, and I 
hope we will be joined by some others.
    So I do want to welcome you and welcome the witnesses here 
today. The purpose of this meeting, of course, is to review the 
Park Service's business strategy for operating and managing the 
National Park System, including the development and 
implementation of the business plans, the use of the business 
consultants, and incorporating business practices into the day-
to-day operations of the parks.
    The Park Service, of course, has a challenging mission of 
preserving the parks, providing for visitor enjoyment, at the 
same time operating under a limited amount of resources, and so 
hopefully using those as effectively as we can, while also 
seeking more, of course.
    Since 1916, the Park Service has grown, and continues to 
grow, 388 units now with visitation of approximately 300 
million people. Involved in that visitation and those units are 
23,546 employees managing an annual budget which is indeed 
sizable, about $2.6 billion.
    Improperly, we think the Park Service's responsibility is 
to manage the resource and to make it good for visitors, but 
also with a program of this size, one of the responsibilities 
is to do it as efficiently as we can and in the most business-
like way that we can. I've been pleased with the progress that 
I think has been made over the last several years in terms of 
moving in that direction.
    So we want to gain a little better understanding today of 
the business practices, the tools and the techniques that are 
currently being used, how you evaluate those, and what you 
think might be done to implement them in the future, and to 
improve the accountability of the system.
    So thank you all for being here and we look forward to your 
remarks. They, of course, will be on the record, and even those 
members that aren't here will have a chance to look at them, 
and I think they will be very important.
    Mr. Bruce Sheaffer is the Comptroller of the National Park 
Service; Mr. Tom Kiernan is president of the National Parks and 
Conservation Association; Mr. Flip Hagood is senior vice 
president of the Student Conservation Association in Virginia; 
and Mr. Geoff Baekey is manager of PricewaterhouseCoopers in 
Boston, that of course is the business person involved.
    So, gentlemen, we'll just go right down the list.
    Mr. Sheaffer, if you'd like to begin.

    STATEMENT OF BRUCE SHEAFFER, COMPTROLLER, NATIONAL PARK 
              SERVICE, DEPARTMENT OF THE INTERIOR

    Mr. Sheaffer. Thank you very much, Mr. Chairman, for the 
opportunity to be here and to be sitting among my partners in 
many of the ventures we're going to talk about briefly today. 
At no time in the Park Service's history has it been more 
important that we improve our processes, become more business-
like, and to the maximum extent possible be transparent in our 
operations and effective and efficient in the way we do 
business.
    We're going to talk about some of the ones that you 
mentioned in your summary statement there very quickly, and I 
have a fairly lengthy statement that I would like to enter into 
the record.
    Senator Thomas. It will be entered in the record.
    Mr. Sheaffer. Thank you, sir. I'm going to kind of 
summarize these items in the order that they were kind of 
invented, if you will. And I think the business plan process is 
one you may have heard something about over time. Actually its 
beginning really grew out of something I think that was very 
personal to you, and that was in the mid-1990's when there was 
some controversy over some decisions made actually in 
Yellowstone National Park, Senator. And at that time there was 
some discussion as to how it is they arrived at that particular 
decision, the closing of a campground in this case, and how it 
was that we were going to document--how it is we documented 
those things that were important for the fundamental operation 
of that park. And we had a difficult time in our communication 
and our presentation. There wasn't a single document that could 
be held out and used as a real clear presentation as to how 
they were programming and spending their money. And thus the 
business plan was born.
    At the time we started the business plan process, we 
engaged with NPCA, who voluntarily agreed to be our partner in 
this process, and provided us some funds to get it moving. And 
a determination was made that a way to get at a quick and 
effective tool here would be to bring in business consultants, 
consultants that had graduate degrees, had some experience 
already in the business world. And so we went about recruiting 
from some of those schools, using at the time NPCA, and have 
had a summer program ever since that produced about a dozen 
plans a year in 12 different parks or programs, major programs.
    The business plans--and we have some examples that we can 
leave with you and provide plenty more. The business plans fill 
a number of gaps that exist in the way the parks present and 
manage their budget, not the least of which is it has, under 
one cover, all sources of funds that are brought to bear in 
operating and developing a park area, including, of course, 
donations, fee revenues, and a variety of the ever-growing 
number of fund sources available to a park. It shows the 
history of the funds, and the history of the park's operational 
funding. It does provide some indication of additional needs 
and has a very strong and ever-growing section that deals with 
strategies for non-appropriated solutions to park operating 
problems. In this particular day and age, with highly 
constrained budgets, that is ever increasing in its importance.
    As I said, the notion of bringing graduate students to bear 
provided a number of things. It provided us an opportunity to 
get some real fresh ideas from outside and in the private 
sector on how we might improve our operations. And by the way, 
as I think an important notable byproduct, we've been able to 
hire some of these young people, and I question if we would 
have been able to do so without exposing them first to the 
National Park Service in this way. We actually have 17 of these 
very well-educated people, from some of the best business 
schools in the country working for us now, many of them in the 
concessions arena, an area I know is of particular interest to 
you.
    Second is the scorecard. The scorecard is another process 
that fills another gap, we feel. Historically the Park Service 
set its priorities by rendering a series of judgments of park 
managers. It didn't have as much structure as it needed in 
order to convince those outside how it is we set our priorities 
and how we went about evaluating our programs. The scorecard 
fills that gap. It analytically looks at certain relationships, 
certain deficiencies that should or do exist in park areas, 
looks at the history of the funding as well, and draws 
comparisons over time of one park to the other and how well 
situated they are to handle the workload that they have to deal 
with.
    Core operations--one that I think you've had some recent 
conversations about with our Deputy Director and Fran Mainella, 
our Director--is a program that has been recently employed that 
sits managers at different levels from regional level and 
elsewhere down with organizational managers and they go 
through, person by person, function by function, and review the 
operation of the park to determine the things that are 
essential to the mission of that park area and that program 
that are at the center and core of that program, those things 
that are legally mandated, and some of those things which are 
very good and desirable to do, but not necessarily core.
    There are a number of other processes we have underway, and 
with more time, of course, we could get into more depth. Mr. 
Chairman, I do want to mention that we are heavily engaged in a 
program that I think is well known at this point called an OMB 
PART review program, as well. It's a program that OMB has 
invented that analyzes Federal programs in a fairly detailed 
way, looking at the way in which the--making certain of certain 
things. For example, they make sure the purpose of the program 
is well defined, make sure that the success of the program in 
fact can be measured, and make sure that it has effective 
oversight and management.
    So in a very short time, I've summarized these things, and 
I think some of the folks to my left and our partners in these 
processes will speak to some of these same items as well.
    [The prepared statement of Mr. Sheaffer follows:]

   Prepared Statement of Bruce Sheaffer, Comptroller, National Park 
                  Service, Department of the Interior

    Mr. Chairman, thank you for the opportunity to appear before you at 
this oversight hearing on the National Park Service's business strategy 
for operation and management of the National Park System, including 
development and implementation of business plans, use of business 
consultants, and incorporating business practices into day-to-day 
operations. The use of effective business practices to fulfill our core 
work is one of the key aspects of promoting management excellence, one 
of the Director's five stated goals for the next four years. We have 
been moving on several fronts to adopt more business-like practices and 
we are pleased to share with the subcommittee our progress in this 
area.
    One of the most important areas in which the National Park Service 
(NPS) is pursuing more business-like practices is in our budget 
formulation process the process we use to determine the most effective 
and efficient allocation of funds requested in the President's budget 
and appropriated to NPS by Congress. Over the past several years, we 
have adopted four new tools that are improving that process: the park 
scorecard, a core operations analysis, the budget cost-projection 
module, and business plans. In addition, the NPS is participating in 
the use of the Program Assessment Rating Tool (PART), a government-wide 
initiative that attempts to move agencies toward greater levels of 
budget and performance accountability. Examples of other areas in which 
NPS is engaged in more business-like practices include the concessions 
program, facility maintenance, the Department's all-in-one business 
system, and competitive review processes.
    The park scorecard NPS has developed is an indicator of each park's 
financial, operational, and managerial health. In addition to serving 
as a management tool for the park superintendent, the scorecard is used 
to aid in the identification and evaluation of base budget increases 
for park units. It provides an overarching snapshot of each park's 
current situation by offering a way to analyze individual park needs 
and to understand how parks are faring relative to one another based on 
broad, objective criteria. The current version of the scorecard has 
over 30 separate measures identified, all of which are grouped into 
four categories: financial management, organizational management, 
recreation, and resource management.
    Although not yet fully developed, the scorecard played a role in 
the selection of parks for the additional FY 2005 operations funding 
provided by the Congress. The scorecard will be continually evaluated 
and expanded to meet park performance and budget needs and we 
anticipate that its use, in time, will aid NPS in evaluating all base 
programs, as well as incremental changes.
    In addition to the scorecard, we have developed a core operations 
analysis process that integrates management tools to improve park 
efficiency. This process has been used successfully in the 
Intermountain Region, which has set a goal of reallocating resources 
equivalent to at least 10 percent of base funds to key activities and 
top park priorities. Each park within the region is seeking to: 1) 
achieve personal services and fixed costs equal to or below 80 percent 
of base funds; 2) pursue efficiencies based on cost-benefit analyses of 
alternatives; and 3) ensure that each park's base budget relates to 
core operations and overall National Park System goals and priorities.
    To achieve these goals, the Intermountain Region went through a 
multi-step process. The region:

   Undertook an exercise of projecting their costs into the 
        future if they made no changes at all in organization 
        structures, program delivery, distribution of personnel and 
        resources, and management practices;
   Compared this projection with likely available funding and 
        concluded that without any priority setting or improved 
        management they would experience a shortfall in resources;
   Identified clear ``purpose statements'' for each park and 
        identified each park's priorities;
   Reviewed and analyzed the current allocation of personnel 
        and resources by each activity, examining whether the activity 
        was a core activity, legal requirement, desirable but not 
        absolutely necessary, and determined whether FTEs could be 
        eliminated or whether more FTEs were needed for that activity;
   Identified current and potential efficiencies that reduced 
        costs per unit of output, avoided costs, generated cost 
        recoveries, or eliminated lower-priority activities;
   Developed an action plan to implement the potential 
        efficiencies; and
   Worked with employees to communicate, implement, and adjust 
        the plan.

    A sampling of the significant results generated by this effort 
includes:

   The region's Cultural Resources Division reorganized three 
        units into one functional organization, reducing FTEs by 12, 
        flattening the organization structure, and making possible a 
        reallocation of over $1 million annually;
   Chickasaw National Recreation Area reorganized trash pickup 
        in campgrounds to reduce the number of hours from 1,800 to 600, 
        making possible a redirection of $37,020 to higher priority 
        activities;
   Rocky Mountain National Park proposed to close one of six 
        visitor centers, which would enable reallocation of three FTEs 
        and over $40,000 to underserved core activities; and
   San Antonio Missions National Historic Site combined 
        administrative and special projects officer positions with a 
        reduction of one FTE and a possible reallocation of $100,000 to 
        maintain needed ranger positions.

    The core operation analysis process is designed to assist park 
management in making fully informed decisions on staffing and funding 
alternatives that tie to core mission goals. This will ensure that 
funds are spent in support of a park's purpose, that funds are spent in 
an efficient manner, that a park's request for funding is credible, and 
that there are adequate funds and staff to preserve and protect the 
resources for which parks are responsible.
    Both the scorecard and the core operations analysis process are 
used in preparing park business plans. Business plans help parks to 
focus on operations, develop cost objectives, identify revenue sources 
beyond appropriated funds, and plan out the highest priority projects 
for the next three to five years. Our business planning has evolved and 
improved. Early generation plans tended to identify park activities and 
core needs; restructuring or changing service practices to achieve 
efficiencies; or developing strategies for meeting goals beyond seeking 
additional appropriations. Our business plans now provide a better 
roadmap and strategies for addressing priority needs and park goals.
    As part of our business plan initiative, the Student Conservation 
Association, a nonprofit organization, sends graduate students from top 
business, environmental management and public policy schools across the 
country to work at park units during an 11-week summer internship. Over 
the last nine years, more than 200 students have participated in the 
program, with many of them now working full time at the park, regional, 
and national levels. With the help of the Student Conservation 
Association internship program, we will be able to complete 12 business 
plans this summer.
    To assist park units in preparing business plans, we have 
developed, through a contract, an Electronic Performance Support 
System. This system supports consistency across the entire program 
through the use of a standardized template, reduces workload on 
existing park staff, and allows for archiving of business plan-related 
data. Through automation, the time needed to assemble and process data 
has decreased, providing more time during the summer for parks to 
develop a true action plan and to focus on financial strategies.
    Park scorecards, the core operations analysis process, and the 
business plan initiative have been developed with built-in connections 
to the individual park's goals, the NPS's goals, and the Department's 
Strategic Plan to assure that all business strategies and processes 
conform to the Government Performance and Results Act of 1993 (GPRA), 
which requires the utilization of budgetary resources to reach 
strategic outcomes and to measure our efforts to reach our goals 
against documented baselines.
    Complementing these processes is the recent development of the 
budget cost-projection module, a tool that allows park managers to 
project the financial impact of decisions made today on future park 
budgets. Managers enter their assumptions regarding staffing (e.g. 
retirements, filling vacancies), pay and benefit changes, inflation, 
and the cost of meeting new program requirements over a five-year 
period. The system then provides a financial roadmap for the manager to 
determine the sustainability of their financial assumptions.
    In addition to these measurement tools and methodology, the NPS is 
also participating in the use of PART, a government-wide initiative 
that attempts to move agencies toward greater levels of budget and 
performance accountability. PART is a systematic method of assessing 
the performance of program activities across the Federal government 
that was created and implemented by the Office of Management and Budget 
(OMB). It is a diagnostic tool used to improve program performance by 
reviewing overall program effectiveness, including program design and 
implementation and the ability to achieve results.
    PART reviews have been completed, or are currently underway, on 
about seventy-five percent of the programs in the FY 2006 NPS budget 
request. The remaining programs are scheduled for review in 2006. All 
NPS programs which have completed PART reviews received acceptable 
scores except for Land and Water Conservation Fund State Grants, which 
received a ``Results Not Demonstrated'' rating due to a failure to 
demonstrate an adequate process for measuring performance and 
accomplishments. Both the Natural Resource Stewardship and the National 
Historic Preservation Programs received a score of 83 percent and were 
deemed moderately effective.
    The NPS continues to work with OMB to develop performance measures 
for programs that have insufficient or inappropriate metrics in place 
and implement recommendations to improve program performance and 
efficiency. PART evaluations and recommendations continue to inform 
both budget formulation and program management decisions.
    There are several other areas in which NPS has adopted more 
business-like practices in its operations. A critically important one 
is our concessions program, where business consultants have helped 
bring best business practices to our efforts and develop protocols that 
focus on the key processes of contracting and contract oversight in all 
concession contracts. We are also professionalizing our concessions 
work force; in fact, several of the business graduate students who have 
helped develop business plans have been hired by NPS for concession 
management positions. These practices are helping ensure that park 
visitors receive the best possible services. The concessions program is 
one of the NPS programs that is currently undergoing a PART evaluation.
    Another key area where the adoption of business practices is 
demonstrating real results is in facility maintenance. As part of the 
President's initiative to address the deferred maintenance backlog, NPS 
has, for the first time, developed an inventory of all facilities in 
eight industry-standard categories. We will complete comprehensive 
condition assessments of those facilities, for the first time, by the 
end of 2006. Those assessments will be critically important in future 
decisions about the most effective and efficient way to allocate 
maintenance dollars.
    The NPS is also a full partner in the Department's effort to 
implement an all-in-one business system--the Financial and Business 
Management System--that will not only replace all of its bureaus' 
individual finance systems but will also encompass all other business 
activities such as procurement and travel, and make use of activity-
based costing methodology as a tool for best practice identification 
and the strategic realignment of resources.
    The NPS has improved its competitive review process by conducting 
preliminary planning with the assistance of outside industry expertise 
to ensure that we have the best, most efficient organization and 
operations in place. Significant benefits are being realized in terms 
of aggressive staff management, which include position review, 
replacing vacant park administrative positions with new business 
management positions, and determining to compete functions if they are 
found more efficiently performed in the private sector. One successful 
outcome of this process occurred at our Southeast Archeological Center, 
where operations were reconfigured to a more efficient workforce 
structure, saving an estimated $850,000 per year over five years. 
Another was at Natchez Trace Parkway, where facility maintenance 
savings resulting from a competitive review will save $1.2 million over 
five years. In both of these cases, by improving the management of 
these functions, the NPS employees were retained and the savings were 
kept by the park. Five areas began undergoing preliminary planning 
efforts in 2004. Another three parks are scheduled for preliminary 
planning this year.
    Mr. Chairman, this concludes my statement. I would be happy to 
answer any questions you or other members of the committee might have.

    Senator Thomas. Good, fine. Thank you, sir.
    Mr. Kiernan.

          STATEMENT OF THOMAS C. KIERNAN, PRESIDENT, 
            NATIONAL PARKS CONSERVATION ASSOCIATION

    Mr. Kiernan. Thank you, Mr. Chairman, for the opportunity 
to testify. I'm Tom Kiernan, president of the National Parks 
Conservation Association. We have, since 1919, been the 
nonpartisan leading voice for the American people in protecting 
and enhancing the National Park System. We currently have about 
300,000 members nationwide.
    Mr. Bruce Sheaffer summarized some of the history of the 
business plan initiative. Let me just build on what he said by 
highlighting two, if you will, external benchmarks of success 
of this program. There are a lot of examples inside the Park 
System of the success too that the committee may not be aware 
of. One is, in 2003, the Harvard Business School wrote a 
business case, that is now being taught to many of the students 
at the Harvard Business School, on effective public-private 
partnerships and that case was on the business plan initiative 
that was created through this partnership, and I think helps 
justify or helps explain the importance and the success of this 
initiative.
    The second is the extent to which, through a number of 
means, including NPCA Center for Park Management, this 
methodology is now being employed on many other public lands. 
About a dozen national forests now use the business plan 
methodology, a number of State park systems--Vermont, New 
Mexico, and others--and a number of international national park 
systems, for example, the parks of Egypt. The Red Sea parks in 
Egypt, the national parks in Madagascar, and other countries 
are as well employing either this methodology or a derivative 
thereof, and it speaks, I think, to the importance and 
effectiveness of the methodology.
    I do have a few recommendations, a number of which are in 
our written testimony, which we have submitted to the 
committee, and I'll just summarize a few of them in a moment. 
First, with regards to the methodology itself, over the last 8 
years, the Park Service, with NPCA, and now with SCA, has 
created this platform of the business plans to help 
communicate, budget, plan, and manage in the parks.
    And it's our strong recommendation that what's needed is a 
continued evolution, enhancement, improvement, and keeping this 
methodology alive and evolving. And one way of doing so relates 
to the other methodologies that Mr. Sheaffer mentioned, the 
core operations and the scorecard and others that we do support 
and we do encourage, as I believe the Park Service is doing, 
working to integrate, to link, to bring together these multiple 
methodologies so that they are linked, so that we avoid any 
potential confusion and also so we get the synergy of the 
different methodologies.
    The second recommendation regards the implementation of the 
business plan recommendations. We have noted over the years 
that many of the parks have been able to effectively implement 
the recommendations of the business plan, at Gettysburg, at 
Golden Gate, at Eisenhower National Historic Site. A number 
have very effectively implemented recommendations, saved some 
money, enhanced revenue sources, but a number of parks have had 
difficulty doing that.
    Thus, it's our recommendation to this committee that it 
continue to provide additional funding, because in some cases 
the funding is short or the staff time has been short, or the 
staff and the park have not had the internal expertise to 
implement some of the recommendations. And the parks need 
additional funds both to meet the needs of the parks, as well 
as to improve the management systems and their management 
capability inside the parks.
    The third recommendation regards the data. The business 
plans are a very significant data and strategy resource for the 
Park Service, Congress, and the public that, we would 
encourage, might be more fully utilized. We would recommend the 
Park Service construct an even more enhanced program for mining 
the data and the strategies that have been generated by the 
business plan process.
    For example, a number of the parks, through the business 
plans, identified a need to improve their vehicle fleet 
management, or to improve their fee collection program. And the 
Park Service has now come up with a multi-park strategy for 
helping the parks implement those recommendations. We think 
there may be some other similar multi-park strategies and the 
Park Service should be encouraged to mine that data, and 
frankly may need some additional funding to do so.
    The last recommendation regards model parks. There are a 
number of different management strategies that Mr. Sheaffer 
mentioned that are underway to help codify or to celebrate or 
to demonstrate, and to extend these successes we would 
recommend that together the Park Service and Congress establish 
some type of a model parks program. Such a program would help 
demonstrate current management improvements, transfer them to 
other parks, and by investing additional funds into these model 
parks, help demonstrate and test strategies for other parks, as 
they get additional funds, for how to most efficiently and 
effectively use those added funds.
    In conclusion, we are very pleased to note that the Park 
Service appears to be making significant headway in improving 
its internal management strategies and we commend them for it, 
and are happy to answer any questions you may have.
    [The prepared statement of Mr. Kiernan follows:]

          Prepared Statement of Thomas C. Kiernan, President, 
                National Parks Conservation Association

    Mr. Chairman and members of the Subcommittee, thank you for the 
opportunity to testify on the utility of business planning in national 
parks. I am Tom Kiernan, president of the National Parks Conservation 
Association. Since 1919, the nonpartisan National Parks Conservation 
Association has been the leading voice of the American people in 
protecting and enhancing our National Park System for present and 
future generations. Today we have 300,000 members nationwide who visit 
and care deeply about our national parks.
    The subject of today's hearing is of considerable importance to 
NPCA and we have been working to import the concept of business 
planning into the national parks and other protected areas for the past 
eight years. As you know, the concept for bringing this standard 
business tool to use in national parks was an idea that was hatched in 
Yellowstone in 1997, when Congress asked for documentation of how the 
superintendent arrived at a decision to close a campground due to 
funding problems. It took the park months to gather the needed 
paperwork and make its case satisfactorily. Through this experience, it 
became apparent that the park could use some strategic assistance from 
the business community.
    The National Parks Business Plan Initiative was born the following 
year as a partnership between NPCA and the National Park Service with 
the support of several philanthropies in testing the use of business 
plans in a park environment. As partners, together NPCA and NPS 
approached the task by importing the talents of the best and brightest 
from business and public policy schools around the nation and focusing 
their talents on developing the business plans during their summer 
break, working hand-in-glove with park managers in the field. Over 
time, NPCA and NPS developed a comprehensive template for the business 
students to use that both harnessed existing park data and utilized the 
students' insight.
    The business plans the Park Service has been producing at many 
national park units provide important information about how well 
existing resources enable park managers and staff to accomplish their 
mission. This has been, and continues to be, an evolving program; the 
Park Service deserves credit for continuing to use and improve the 
business planning process. The Business Plan Initiative helps 
strengthen financial management capabilities at parks and facilitate 
meaningful dialogue about park needs. Every year the Park Service's 
business plans get stronger, and the evolution of the program promises 
to continue delivering important benefits in the coming years.
    It took several years to refine the program to the point that it 
appears today--a web-based system that assesses the human and financial 
capacity of parks to respond to their responsibilities in dozens of 
categories from concessions management to trails maintenance. The 
program now used by the Park Service is replicable by the parks on a 
regular basis and has the capacity to allow managers to track their 
progress towards addressing shortfalls and problems identified by the 
plans. The partnership between NPCA and NPS lasted for six years and in 
that time we completed 64 park business plans. In the past two years, 
NPS and the Student Conservation Association have completed 24 business 
plans for park--though seven of these plans are updated plans from 
parks that completed the process years ago. Once the plans being done 
this summer are published, we estimate that more than 25% of all units 
in the National Park System will have complete business plans.

                     PURPOSE OF PARK BUSINESS PLANS

    From the time that the concept was conceived in Yellowstone to 
today, business plans have been intended to serve a dual purpose: to 
provide parks with an effective external communications tool and to 
provide park managers with a useful management tool. In 1997, during 
the first business plan training session at the historic Lake Ranger 
Station in Yellowstone, the park managers participating in the program 
had an extended and prescient discussion about this dual role and the 
potential importance of business planning to the national parks. The 
conclusion in that meeting was that the communications role of business 
plans would be the role most used by the parks but the most important 
role of the business plans was their use as a management tool, 
providing the most long-term utility in helping park managers operate 
as effectively as possible, no matter the resources available. That 
observation. remains true today and outlines both the problems that the 
Park Service has experienced and the promise that well-done business 
planning holds for the parks.
    As a communications tool, the focus of the business plan program is 
on the product itself. Like no other product available to the Park 
Service (or most other federal or state agencies) business plans 
encapsulate the ``business'' of the park: what the park is about, its 
mission, focus, strategic direction, allocation of human and financial 
resources, additional resources needs, and opportunities for 
betterment. This is accomplished in a compressed period of time and 
expressed in a reader-friendly, open format. Parks have used the 
business plans to educate new staff, new management, and stakeholders 
of all kinds, from members of Congress to gateway community leaders. 
They have also proven useful as internal educational tools for NPS 
regional and national managers, giving parks that have completed 
business plan an advantage over others in arguing for the allocation of 
limited dollars distributed at the Washington and regional levels.
    As a management tool, however, the focus and greatest benefit of 
the business plan program is in the process of business planning 
itself. The program today is ``managed'' and the product delivered by 
the business planning team in Washington, using student consultants in 
each park to produce individual plans. But development of each plan and 
the analysis behind it requires very heavy participation by the entire 
management structure of the park itself, and frequently requires the 
involvement of line staff as well. This process, though sometimes 
painful for the parks as they struggle to meet their existing 
responsibilities, forces a creative and useful interaction between 
business-focused bright young minds and more traditional park-focused 
staff. The result for many parks has been an infusion of energy and 
focus on core priorities by both management and staff and a clearer 
realization of the opportunities as well as challenges facing the 
parks. In short, it helps parks to define their forward focus and 
remind parks of their own core ``business,'' aligning mission 
priorities with the distribution of park human and financial resources.

                      BUSINESS PLANS REVEAL TRENDS

    The plans examine funding and staffing trends, describe the history 
and growth of the parks, provide functional analyses, and identify 
strategic priorities and ways to more efficiently use scarce financial 
resources for the benefit of park resources and visitors. The plans 
typically examine five program areas: (1) resource management; (2) 
visitor experience and enjoyment; (3) facility operations; (4) 
maintenance; and (5) management and administration.
    Importantly, the business plans have helped identify the park 
operational areas with the most significant needs, as well as produce a 
variety of recommendations and innovative solutions. The two functional 
areas generally shown to need the most attention throughout the park 
system have been resource protection and visitor experience and 
enjoyment, both of which are generally also the most under funded. 
Resource protection programs generally include collections, historic 
structures, and natural resources. Visitor experience programs 
generally include interpretation, education, and visitor safety.
   business plans as the first--not the last--step toward improvement
    The success of business plans as tools for enhancing communications 
and management is tied very tightly to the understanding that business 
plans are the first step in a process of improvement--not the last 
step. In NPCA's experience, there is a one-to-one correlation between 
parks that have had a successful experience with business planning and 
the superintendent and management team's level of understanding of this 
principle. Park managers that see the document as the final deliverable 
and expect it to work magic for them by itself are always disappointed. 
Park managers that take the document with them wherever they go, have a 
coherent distribution plan, and take the resulting recommendations as 
the launching platform for defining practical and implementable 
strategies for improvement inevitably go on to achieve results that 
empower their staff and deliver both efficiencies and additional 
resources. The Park Service is now on a path toward repeating the 
business plan analysis accomplished in the parks in the early years of 
the program. This should prove to be an especially powerful next step 
as it provides an opportunity to actively measure progress.

                NPS USE AND SUCCESS WITH BUSINESS PLANS

    Business plans have enabled many national parks to identify and 
address issues that saved money, leveraged additional resources, and 
improved management, among other things. For example, Gettysburg 
National Military Park and the Eisenhower National Historic Site, two 
separate units overseen by one superintendent, completed their business 
plan in 2002. In the past three years, the park units have acted on a 
number of the business plan's strategies for reducing costs and 
increasing non-appropriated funds. The park staff has implemented a 
Workforce Planning Strategy through which managers review every 
position as it becomes vacant to evaluate how critical those positions 
are to accomplishing the park mission. While this strategy does not 
help the park fill all necessary vacant positions, it does help them 
manage the vacancies better.
    One of the greatest achievements was the combining of Gettysburg 
and Eisenhower operations: Park managers have eliminated positions that 
were dedicated to site management and maintenance of Eisenhower and 
have made those tasks collateral duty for Gettysburg staff. The 
estimated savings of $150,000 to $180,000 annually enables the park to 
cover other critical needs at Gettysburg that were threatened by 
diminished ONPS spending power.
    At Golden Gate National Recreation Area in California, the park 
followed through with its business plan recommendation to increase 
visitor fees at Muir Woods, capturing an additional $700,000 annually; 
and the park has moved forward with transferring operating costs for 
building maintenance to third parties that occupy some of the many 
buildings in this former military base and improving energy 
conservation. The park has also leveraged its volunteer program; it now 
generates the equivalent work of 150 full-time equivalents a year.
    At the conclusion of the business plan partnership between the Park 
Service and NPCA, however, it became quite clear that some parks had an 
easier time meeting the challenge of implementing the plans than 
others. In fact, many parks were approaching the challenge if 
implementing their business plans with a passive attitude that NPCA 
feared could lead to the end of a program with enormous potential for 
improving the national parks. After some investigation, we discovered 
that the reason for the passive approach expressed by some parks was a 
direct result of their not understanding how to implement the plans. 
Though the analytic resources were available to them for the purpose of 
developing the plans themselves, there were no tools available to help 
determine the next steps and which management strategies might be more 
successful than others. To respond to this, NPCA established the. 
Center for Park Management to redouble our efforts on business 
planning--this time with an emphasis several critical areas: (1) 
helping parks follow through with their own business plans; (2) 
developing communications plans for parks; (3) helping park managers 
through the decision-making process regarding the steps to take in 
implementing solutions to needs identified in the plans; (4) 
identifying the management strategies most likely to produce the most 
beneficial results; and (5) helping to resolve any underlying staff or 
analytic challenges that impeded progress. In order to directly help 
the parks that were interested, CPM established consulting/client-type 
relationships with the parks and divorced itself from any role as a 
more active external advocate.

            WORLD-WIDE UTILITY OF THE BUSINESS PLAN CONCEPT

    The National Park Service is by no means alone in thinking that 
business planning has a place in fostering the long-term health of 
parks. As NPCA's Center for Park Management has focused on helping 
parks implement their business plans, we have also reached beyond the 
parks to develop business plans with more than a dozen national 
forests, a growing list of state park systems, and systems of protected 
areas abroad. The issues and pressures facing the parks--funding 
shortfalls, unclear priorities, and communications challenges--are not 
unique to America's national parks. To the contrary, there are 
surprising parallels in every system with which we have worked, from 
New Mexico State Parks to the Red Sea parks in Egypt.
    Business plans and other analytic and management tools are 
commonplace to the business of managing protected areas worldwide, and 
this concept can be helpful to park managers here and elsewhere. From 
generating efficiencies so that fee collection rangers can do more with 
their time and efforts at Virgin Islands National Park, to the reversal 
of a negative gateway community relationship at Fort Stanwix, to the 
creation of a marketing plan to increase visitation at Big Bend in the 
off-season, parks that implement their business plans experience 
material gains.

                LESSONS LEARNED AND FUTURE OPPORTUNITIES

    NPCA's experience nationally and internationally with business 
planning allowed us to identify some of the limitations of the existing 
program and develop ideas for improving it. Our observations are as 
follows:

    1. Many parks are using the business plans for outreach to 
stakeholder groups, but many more would benefit from more coherent 
planning to define the outreach message they want to convey, and to 
identify the audiences that may be the most helpful or strategic.
    2. The business plan program remains a time-intensive program that 
ties the student consultants to data collection instead of analysis for 
the majority of their time. The program should be tweaked to allow much 
more time for analysis and identification of useful management 
strategies as well as some teaching of the managers to ``open up'' the 
analytic process and prepare them for moving toward implementation on 
their own.
    3. The Park Service should find a means for staffing the business 
plan office in Washington or elsewhere with sufficient human resources 
so that the agency itself can respond to the needs of the parks as they 
move toward implementation. Through the Center for Park Management, 
NPCA has provided this service to date, but alone we have insufficient. 
staff and financial resources to provide support to all of the national 
park units that need assistance.
    4. The Park Service should construct a program that focuses on 
actively ``mining'' the data that has been generated by the business 
plan process. Standing behind every 30-40 page business plan is a pile 
of data and analysis. Focus on this could tell the agency and Congress 
much about the allocation of existing funds toward priorities, the 
balance of visitor-directed funds as compared with resource-directed 
funds, the unit cost of certain types of programs, and more.
    5. Business plans themselves should be analyzed for common themes 
and strategies that emerge from the field and the common issues should 
then receive appropriate regional or national attention. This will 
allow for the development of common implementation strategies that work 
for both the individual park units and the more centralized managers. 
Fleet management and fee collection management are two areas that come 
easily to mind for us, as we have seen and worked on them with a broad 
variety of parks.
    6. Park managers should start talking about their experience with 
business planning with other protected area managers outside of the 
National Park System. Business planning in one form or another is a 
increasingly popular tool in protected areas of all types, both in the 
United States and around the world. Rather than thinking only about 
their own experience with business planning, the Park Service should be 
actively seeking the experience of others--in the Forest Service, in 
state parks, in Australia, New Zealand, Canada, and elsewhere to 
identify best practices.
    7. The Park Service should be actively evolving the business plan 
program to best meet the needs of park managers. Even the best-designed 
programs in business and government require constant updating if they 
are to remain vital, useful, and strategic. The Park Service should 
approach its efforts with business planning no differently, preferably 
with some insight to what works outside the Park System itself.
    8. Together, the Park Service and Congress should establish a 
``venture capital'' fund to invest in the analysis required to identify 
the best, most practical opportunities that save money for better, 
broader use by the parks, or generate or leverage funds best. It is a 
simple and true adage that sometimes it takes money to make money. It 
is no different in the Park Service--many parks need the financial 
resources to move ahead with business plan strategies that will save 
money now or generate more later.
    9. Congress should ask for a periodic accounting of how additional 
funds are being allocated to business plan parks--and to the agency as 
a whole--as compared with the needs identified in those plans.
    10. Finally, the Park Service should regard the business plan 
process and products as the single ripest opportunity to reach out to 
existing partners and develop new ones. The Director is absolutely 
correct in her statements that the agency can not survive without the 
assistance of many partners. The business plan process is a tool that 
is tailor-made for introducing parks to new potential partners and 
involving current partners. Currently, some parks see this clearly and 
others less so. National and regional emphasis is required to identify 
the cultivation of beneficial partnerships as a target goal of business 
plans.

             RELATION OF BUSINESS PLANS TO CORE OPERATIONS

    The National Park Service has been developing a new core operations 
analysis that can be used to supplement and further inform the business 
plan process in the future, if done right. The Park Service has yet to 
finalize how the core operations process will or should work, so NPCA 
continues to watch this developing approach closely. As we understand 
it, however, we believe the new core operations approach can be useful 
in helping national parks prioritize how best to spend their limited 
funds in light of their core mission. This being said, it is essential 
that core operations analysis be used to inform and supplement, not 
replace, business planning. In addition, it will be important for the 
Park Service to develop a core operations process that is sufficiently 
flexible that it allows the mission and focus of particular national 
parks to evolve as we learn more about the treasures those parks 
preserve. For example, last year Congress, with the help of this 
subcommittee, passed legislation to expand Petrified Forest National 
Park. Among the primary purposes of that expansion was the realization 
that the park and surrounding areas are a world class paleontological 
resource. But when the park was first set aside, we only knew about the 
beautiful petrified wood that was there. In addition, core operations 
must ensure that park visitors have the best possible opportunity to 
benefit from Park Service interpretation of the resources and artifacts 
preserved in our 388 national parks.

                               CONCLUSION

    The challenge for the Park Service is to continue to develop the 
program in a manner that maintains the focus on the needs of managers 
in the field, continually evolves to reflect lessons learned and best 
practices from within and outside the agency, and uses the information 
generated for productive, strategic purposes on a regional and national 
scale.
    For ourselves, NPCA will continue to press for ways that the 
national parks can improve their management and efficiency, while 
advocating that the parks also receive the additional resources for 
which virtually every business plan demonstrates a need. Although many 
parks have room to improve their management efficiency, our extensive 
experience with business planning in the parks has made it clear that 
the shortage of needed fiscal resources lies at the root of many of the 
ills facing the parks today. As the subcommittee knows, the national 
parks face significant funding shortfalls.
    Clearly, the national parks must make every dollar count, no matter 
the level of funding available, and we are working to ensure that the 
parks have the best tools and the right human resources to make sure of 
this for the future. But business plans, themselves, are not a panacea. 
Rather, they provide powerful tools to help lead the way to the 
fiscally sound, healthy, well-protected National Park System that 
Americans respect and deserve. For business plans to produce a long-
lasting impact, Congress must use this tool to guide, and where 
necessary, make investments in park operations and maintenance, demand 
from the Park Service broader implementation of the plans' recommended 
efficiency improvements, and help the Park Service extend and adapt the 
business plan process throughout the Park System. Thank you for the 
opportunity to testify. I am happy to answer any questions.

    Senator Thomas. Okay. Thank you very much.
    Mr. Hagood.

    STATEMENT OF REGINALD HAGOOD, SENIOR VICE PRESIDENT FOR 
    STRATEGIC INITIATIVES AND BUSINESS DEVELOPMENT, STUDENT 
                    CONSERVATION ASSOCIATION

    Mr. Hagood. Good afternoon, Mr. Chairman. I'm Flip Hagood, 
senior vice president of the Student Conservation Association 
and the current partner of the National Park Service in its 
business plan initiative. SCA is a 501(c)(3) not-for-profit 
that has been in partnership with the National Park Service for 
48 years, one of the oldest non-governmental organizations 
working in partnership with the national parks.
    Annually SCA places young people, high school and college 
age, in national parks in service to the land. Our high school 
program annually puts about 1,000 young people out on our 
public lands, our college program about 2,500 internships, and 
the business planning initiative consultants are included 
within that group.
    Two years ago, we were approached by the National Park 
Service and the Department of the Interior to become the not-
for-profit liaison with the National Park Service in continuing 
the work of the National Parks Conservation Association to 
recruit, to place, to assist in the training, to facilitate the 
ongoing support for the consultants while they were in the 
field, to do two follow-on activities of a closing workshop, 
and also to provide career resource transition assistance for 
further job placement upon completion of the program.
    We have had a great partnership within the last 2 years, 
having placed, with the current crop, 57 intern consultants 
within the field, along with working at 26 varying park units, 
and now three additional offices as a forum for the business 
planning activity.
    The Student Conservation Association also views this 
particular work as very, very important to the effective 
management and also operation of the National Park Service. The 
Student Conservation Association works under a cooperative 
agreement with the National Park Service to provide the 
services that are outlined that support the business planning 
initiative. And that starts out with the planning process, 
right down through the closing activities and the career 
transition effort.
    We assist with the recruitment of the interns by a network 
of over 5,000 colleges and universities that we have ongoing 
relationships with. We recruit nothing but the best, we think, 
graduate-level programs within the United States. The cadre of 
young people that are recruited for the consultancies, we 
think, are some of the best and brightest, and we are also 
quite proud of the fact that now many of them are moving on to 
job placement opportunities within the National Park System, 
within government, and also within the private sector.
    I know that Mr. Baekey will speak of the role with Coopers, 
and we've got interns now there. Booz Allen Hamilton also has 
interns, so we're certainly seeking some equity in that sense. 
We have also been able to support upper governmental placements 
and we are looking forward to that transition out of the 
current class as well.
    In addition, the Student Conservation Association is 
assisting in what I would call hoping to institutionalize the 
model of the business planning process by giving support, 
counsel, and following the process by ongoing site evaluation 
and program support for the interns while they are in the 
field. I, myself, this summer will be visiting a number of 
those sites, working with the park staff and with the interns 
as they go through the business planning process, and will also 
be a part of the close-out presentation that will be given to 
the directorate of the National Park System this coming early 
fall.
    The important component of the career transition element 
that we have been asked to put into place will continue to 
grow, and we feel that we can bring added value to that process 
to the National Park Service by supporting the efforts, by 
giving career counsel, and also supporting the transition of 
the interns into possible job opportunities, and hopefully to 
expand that in government. And we're already about that process 
by continuing our work with the land management family overall.
    We have agreements with 14 Federal agencies, wherein this 
kind of process, we think, might have similar application. We 
are a part of a consortium called the Cooperative Ecosystem 
Study Units that is led by the National Park System, working 
with 195 colleges. And we work collaboratively with those 
schools and institutions to support the work stated as the 
goals and objectives of the business planning internship.
    Currently, for this summer, there are 31 interns in the 
field on the Student Conservation Association partnership with 
the national parks at 12 sites. And I'd like to cite the fact 
that we have now moved beyond the traditional parks by also 
working with an educational initiative and creating a business 
plan, working with one of the regional office staffs, as well 
as working to assist one of the park's units in furtherance of 
its business plan at one of the training centers of the 
National Park Service.
    We look forward to continuing this relationship with the 
National Park Service. We will be doing the evaluation in 
partnership this year with the National Park Service and a 
close-our presentation to them as we are required to do 
annually under our cooperative agreement. We thank you for this 
opportunity to testify here today in support of what we feel is 
a very strong and valuable initiative for our national parks, 
and we look forward to this continuing relationship. Thank you 
very much.
    [The prepared statement of Mr. Hagood follows:]

   Prepared Statement of Reginald Hagood, Senior Vice President for 
 Strategic Initiatives and Business Development, Student Conservation 
                              Association

    The National Parks Business Plan Initiative (BPI) is a creative 
public/private partnership designed to promote the long-term health of 
our national parks through development of improved financial planning 
and management tools. The BPI is collaboration between the Student 
Conservation Association (SCA) and U.S. National Park Service (NPS). 
Graduate students from leading business and public policy schools are 
placed in an internship by SCA as management consultants in selected 
national parks. The consultants work with park staff to produce a 
business plan that clearly outlines park operational requirements, 
identifies available financial resources that are currently available, 
and analyzes any funding gap that exists. Consultants also work with 
park staff to identify operational and investment priorities and 
develop strategies for meeting those needs. In addition, some parks 
that have produced business plans in the past are revisited to update 
their plans and/or perform various in-depth analyses to assist in 
program development. In the past two years, SCA has engaged 26 National 
Park units and placed 57 Business Planning consultants through this 
partnership.
    SCA's established relationship with educational institutions, 
introduces students to the BPI Program and its valuable career and life 
enhancing experiences. SCA assists the NPS with recruiting, site 
placement, training coordination, and administration. BPI consultants 
are recruited and selected by the NPS Business Management Group and 
SCA. They participate in an eleven-week program that typically begins 
the first week in June with a week-long orientation session in a 
national park and ends in mid-August. SCA administrative support 
includes logistical support for participant travel to trainings, 
facilitation of the orientation workshop, administrative and financial 
liaison with the consultant's park site, and the planning and 
conducting of a fall wrap-up meeting held in Washington DC, where 
participants present their Business Plan Document. Finally SCA assist 
in the administration of program monitoring and evaluation as well 
conducting site visits directed at improving future program development 
and training.
    Each consultant reports directly to their park's supervisor, with 
oversight provided by NPS Business Management Group staff which 
additionally provides program leadership, technical guidance, and 
quality assurance focused on maintaining consistency of the analysis. 
Additionally, SCA staff is made available to the consultants for 
additional training, logistical support, and counseling. SCA also 
provides emergency management support for all consultants while they 
are in the field. Each park provides housing and office space.
    Over the course of the summer, teams of consultants interview park 
staff and review budgets and other relevant documents. Consultants 
analyze the park's programs, operations, and activities; identify 
standards of operation for each program; and develop financial and 
management strategies. Consultants produce business plans and utilize 
the online Business Plan Developer (BPD) system for data collection and 
presentation. At the conclusion of their internship, the teams of 
consultants present a report of their findings to park management.
    Upon completion of the program the participants become SCA Alumni 
and through the NPS/SCA partnership we are also able to provide ongoing 
mentorship, career resources and counseling which has resulted in 
employment opportunities for program participants. Numerous BPI alumni 
from the 2004 Business Plan consultant group have accepted positions 
with the National Park Service. Other consultants have gone on to 
accept job placements with other public and private institutions 
introduced to them throughout the program as well as in follow-up 
career transitioning sessions. This has resulted in placements with 
such firms as Booz Allen Hamilton, PricewaterhouseCoopers and the 
General Accounting Office.

    Senator Thomas. Thank you, sir. I appreciate that very 
much.
    Mr. Baekey.

       STATEMENT OF GEOFFREY A. BAEKEY, SENIOR MANAGER, 
                     PRICEWATERHOUSECOOPERS

    Mr. Baekey. Good afternoon, Mr. Chairman. I want to thank 
you very much for the opportunity to testify today regarding 
business practices within the National Park Service. My name is 
Geoff Baekey. I'm a senior manager with PricewaterhouseCoopers, 
and I work extensively with the National Park Service on 
business-related issues.
    Over the next couple of minutes, I'd like to provide you 
with my perspective on how PricewaterhouseCoopers has worked 
with the National Park Service to incorporate best business 
practices. Furthermore, I plan to provide you with specific 
examples of how the NPS has utilized these new business 
practices to enhance their mission.
    Since 2000, PricewaterhouseCoopers has been working closely 
with the National Park Service to enhance their concessions 
program. As you know, this is one of the biggest and largest 
business-based programs in the National Park Service, 
generating over $800 million in gross revenues and serving 
millions of visitors.
    Back when PricewaterhouseCoopers was first hired, the 
National Park Service faced a significant backlog of small and 
large concession contracts. In addition, the Park Service was 
just beginning to implement changes resulting from a new law 
governing concessions. These major hurdles required a new way 
of looking at the business of managing the concessions program.
    Initially, the National Park Service engaged 
Pricewaterhouse- Coopers to complete a comprehensive review of 
the concessions program. One of the major findings from this 
review was that the National Park Service needed to treat the 
largest and most complex of the concession contracts with a 
much higher level of business and financial scrutiny than the 
smaller ones. Pricewaterhouse- Coopers identified 50 contracts 
which necessitated this heightened set of business procedures.
    From 2000 until today, PricewaterhouseCoopers and the 
National Park Service have worked closely to develop detailed 
strategic contracting plans for these ``big 50'' contracts. 
This involved having a multi-disciplined team of professionals, 
including financial, legal, engineering, et cetera, to assemble 
new contracts. Most of these new contracts have 10 to 20 year 
terms, so in essence we were supplementing other efforts in 
developing and implementing long-term business plans for 
visitor services with local park and regional support.
    When we first commenced our work, PricewaterhouseCoopers 
and our subcontractors were responsible for most aspects of the 
contracting process. Over time, however, National Park Service 
professionals have been taking on a greater share of the 
contract due diligence and prospectus development process. One 
recent example of this is in the Intermountain Region, which 
I'd like to share with you.
    The Intermountain Region has the greatest proportion of 
large concession contracts in the National Park Service. Over 
the past year, the region has been recruiting and hiring 
managers with MBAs from top business schools or from recognized 
consulting firms to work in their business management division. 
In addition, the region has been conducting on-the-job training 
with these managers to provide them with the tools they need to 
be effective in the field.
    Today, Intermountain Regional office managers are taking on 
a much more significant role in the contracting process for the 
``big 50'' contracts. With their strong business backgrounds, 
these professionals can handle overall project management as 
well as much of the drafting of the prospectus document.
    The National Park Service is more than halfway through the 
contracting workload that they commenced in 2000. Much is left 
to be accomplished. However, with the introduction of new 
National Park Service business professionals and the knowledge 
that has been gained by the National Park Service, the next few 
years should be very productive.
    Another area where PricewaterhouseCoopers has worked 
closely with the National Park Service is in the business 
process improvement of concessions. With the new law and new 
regulations, the National Park Service engaged 
PricewaterhouseCoopers to help enhance some of the procedures 
used to oversee concession contracts. In the private sector, we 
call this asset management. And, Mr. Chairman, the law that you 
passed in 1998 also contemplated the need for this enhanced 
oversight.
    Once a new contract has been executed, much has to be done 
to provide quality control and compliance. Contract oversight 
activities include financial and operational reviews, 
environmental compliance, management oversight, and other 
compliance activities. One of the most significant activities 
is in the areas of concession evaluation and rate approval. In 
2003, the National Park Service engaged PricewaterhouseCoopers 
to overhaul the concessions standards evaluation and rate 
approval system, also commonly known as SERA.
    Much of the work on SERA involves attempting to instill 
private sector operating and facilities standards to 
concession-operated assets throughout the National Park 
Service. In fact, when PricewaterhouseCoopers first started 
work on SERA, we tried to overlay industry standards and best 
practices to the large concession contracts. What we quickly 
found out is that this did not always work. Park Service assets 
have unique characteristics which are not generally found in 
the private sector. For instance many National Park Service 
locations are historic and require special consideration. 
Working closely with the National Park Service, 
PricewaterhouseCoopers and others tailored best practices from 
the hospitality and travel industries for several asset types. 
The end result was a set of standards which can be used for 
objective evaluation and rate-setting.
    Perhaps the most important benefit of this contract 
oversight re-engineering has been the close collaboration 
between the National Park Service, the concessioners, and 
industry experts. Over the past 2 years, the National Park 
Service has formed a close-knit group of experts within and 
outside the Service who can effectively address all necessary 
business and financial challenges. The feedback from all 
involved has been very, very positive.
    Over the past 5 years, the National Park Service 
concessions program has undergone dramatic change. This has 
been due in part to our efforts, but the real change has come 
from within the National Park Service. Today's National Park 
Service managers have a much better grasp of current business 
and financial best practices and how this applies to their 
jobs. Perhaps most importantly, National Park Service managers 
now understand what needs to be completed within the Service 
and when they need to engage outside advisers.
    Mr. Chairman, thank you once again for the opportunity to 
testify. I'd be pleased to answer any of your questions.
    Senator Thomas. Fine. Thank you very much. Welcome to the 
Senator from Colorado. We've hurried things up a little bit 
and, as you know, we have votes here in a few minutes. So would 
you have any opening comments or general comments?
    Senator Salazar. I'm here to support the national parks and 
the chairman of this committee.
    Senator Thomas. We're glad to have you here. Well, we'll 
have some questions.
    Mr. Sheaffer, do you have written guidelines for the people 
on the ground to promote practices and--I guess I'm concerned 
about the fact that you have general policies and you do it 
here in Washington or perhaps even in the regional offices; but 
are they on the ground? Do people actually have them in hand?
    Mr. Sheaffer. For all of these processes we've discussed 
briefly here today, we have guidelines for each of them. And, 
yes, I believe they're on the ground. I think we have done a 
fair amount of increased documentation over the past--over 
many, many years out of necessity, because processes and 
procedures have become more and more complex, and producing 
these documents is not a simple matter. All of these processes 
take some level of commitment and expertise that frankly in 
many parks is not available to them. The Park Service doesn't 
have a great number of the kind of people that we have supplied 
them with in order to pull these processes off in these areas.
    So, yes, I think we have extensive documentation in all of 
the programs we're discussing, from concessions through the 
business planning process.
    Senator Thomas. I know that sometimes that is a difficulty 
or it appears to be a difficulty in larger agencies to have 
policies at the top and get them implemented on the ground. 
And, of course, all the parks are different and so on. It's my 
understanding you have a business plan initiative in about 70 
parks.
    Mr. Sheaffer. That's correct.
    Senator Thomas. What's your projection on the 388 parks?
    Mr. Sheaffer. Well, the way we're going about it 
accomplishes about a dozen a year. And we have actually taken 
on some of the larger parks in the system, so in terms of the 
percentage of dollars, it's a much higher percentage than the 
70 would represent. And not that we've ignored smaller- or 
medium-sized parks, but we have found that the greatest benefit 
comes from going into the larger park areas.
    We have developed, by the way, a form, a way of allowing 
parks that are smaller to go out on their own and attempt to 
produce in some fashion some of the components of this business 
plan on their own. And that has--taking advantage of some 
fairly modern technologies, IT technologies in particular.
    So ultimately getting all the parks done, it's going to 
take quite a while to actually have business students in 380 
parks for sure. But I think in terms of its effect, I think the 
effect is already being copied. Some of the better, more 
important components are being copied in parks that don't have 
the benefit of this, so the effect is still dramatic service-
wide.
    Senator Thomas. Sure. In the Park Service--and I'm always 
impressed with the overall employees and how loyal they are and 
the background and most of them are very interested in 
resources and this and that. Do you now select and hire people 
that have a business background for this particular program 
that may not have a history in parks, but do have training in 
business?
    Mr. Sheaffer. Well, as I mentioned, we've had great success 
in bringing some of these folks in, and it's of course no 
surprise to anyone that some of these folks can command 
substantial salaries in the private sector that in many cases 
we in the Federal Government frankly can't match. Nonetheless, 
we've been able to attract a fair number of them, as I said, 17 
that we have working at various places in the Park Service.
    The effect that those 17 can have is fairly dramatic, 
especially if they're sitting, say, in my office and providing 
direct aid to these parks, or in a regional office--Mr. Baekey 
mentioned the Intermountain Region being among the leaders in 
hiring these folks--or for that matter, in complementary 
organizations like NPCA, or even our consultants. So we have 
made more resources, more business-like resources available to 
the park today than we ever have in the past.
    Senator Thomas. That's good. They should remember that if 
they want a lot of money, to live in New York City, but they 
get to live in Teton Park.
    Mr. Sheaffer. I think that's very true, Mr. Chairman.
    Senator Thomas. Mr. Kiernan, do you see an emphasis on the 
need, for example, in the commercial activities, more than the 
parks in general, or concessions, where all the bucks are? How 
do you see these things work together?
    Mr. Kiernan. It's our sense, yes, there needs to be that 
additional expertise on the concessions side, the traditional 
business activities, but I would not diminish the benefit of 
the skill set of some of these business-minded folks on 
managing the resources, on managing visitor flow, on fee 
collection. In all candor, it's our sense that this skill set 
has application across the full functional spectrum of the Park 
Service.
    And if I may add, with your previous question, that NPCA 
has been known to advocate for additional funding for the 
parks. I would add that funds are needed to help some of these 
additional staff members in the Park Service improve the 
management of the parks. As they say in business, sometimes it 
takes money to make money. In some of these cases I would 
suggest that additional funds to improve the management of 
efficiency in management training of the Park Service can, as 
well, in the long run, improve the park operations, resource 
protection, et cetera.
    Senator Thomas. It's a little more difficult, I suppose, to 
deal with resource management as opposed to concession 
management in terms of the economics of it. Nevertheless, they 
both exist, don't they?
    Mr. Kiernan. And issues of work flow management, of long-
range planning, of how to efficiently deploy your resource 
staff can--you can do that efficiently from some business and 
management expertises.
    Senator Thomas. True. What--just in general, I don't mean 
to be specific, but what changes, what direction, what 
additional activities, what are your priorities for the future 
in terms of strengthening this program?
    Mr. Kiernan. The business plans in particular?
    Senator Thomas. Yes, sir.
    Mr. Kiernan. I think I'd come back to one of my fundamental 
points. This program has been in place now 8 years, and a deep 
concern we have is that it continue evolving and growing and 
being used in the park, at the regional office, by Congress, by 
the Director, et cetera, that it not become a methodology we 
used in the past and we're now on to some new gizmo 
methodology. It's rolled out there, it's proving very 
effective, and I think Congress and the Park Service need to 
keep building on it. And as I said, with things like core 
operations and the scorecard, which we on NPCA side are still 
getting to understand at the conceptual level we support, I 
think these things can be additive and help move the whole 
management process forward. I would hope it not be set aside 
and we move on to some new management fad. That would be a 
major loss.
    Mr. Sheaffer. If I may, Mr. Chairman, on that question as 
well, one thing that these other two processes we discussed, 
core operation and scorecards, I think will help us do is 
better scrutinize and defend the additional resources that the 
parks, the superintendents, represent that they need in these 
documents. And that's been, quite frankly, a failing in the 
past. And I think that's critical and I think that's one of the 
areas that these other processes are intended to help correct.
    Senator Thomas. As you move, spread out, some of the 
experience you've had can just be spread to the other parks 
and----
    Mr. Sheaffer. Absolutely. That's correct.
    Senator Thomas. Mr. Hagood, where is your organization 
located?
    Mr. Hagood. Our headquarters, sir, is in New Hampshire. 
However, we have a fairly large regional office right here in 
Arlington, Virginia, which I manage.
    Senator Thomas. For training people. Where is that? All in 
New Hampshire?
    Mr. Hagood. It is primarily in New Hampshire. We have 
what's called the Conservation Career Center, which is in New 
Hampshire in the small town of Charlestown, New Hampshire, near 
Springfield, across from Springfield, Vermont, right in the 
Connecticut River Valley. And we actually do the training in 
partnership with the National Park Service in field-based 
sites.
    Senator Thomas. Now, your organization is not entirely 
oriented toward Park Service, is that right?
    Mr. Hagood. No, sir, it is not. We have agreements with 14 
other governmental partners that we work with. The Park Service 
happens to be the largest, with the Department of the Interior 
providing a lot of that work. All of the bureaus within the 
Department of the Interior, we work very much with in bringing 
forth a very similar program style. And we've been able to 
actually bring to the attention to some of the sister bureaus 
within the Department of the Interior this particular process 
by orienting their managers to the fact that the business 
planning initiative is ongoing within national parks, 
specifically the U.S. Fish and Wildlife Service and the Bureau 
of Land Management.
    Senator Thomas. I see. Now, are these students there 
generally just for a short period in the summertime? Is that 
part of it?
    Mr. Hagood. Yes, sir. They are in the field for 
approximately 11 weeks, including 1 week at the beginning that 
is a field training and orientation week that we do in a 
national park. We rotate that east or west for taking advantage 
of a park location to get them familiarized before they 
actually go to their specific site within the field to do the 
business planning process for 10 weeks.
    Senator Thomas. I see. That's interesting. It's a great 
program.
    Mr. Sheaffer. I might just add, too, if I might, that this 
is a plan that, if you've ever been familiar with other plans 
that agencies, or the Park Service, for that matter, has done, 
this is a plan that we produce in 10 weeks, from start to 
finish, at a fairly modest cost of something in the order of 
$35,000 a plan. By most standards, that's a pretty efficient 
operation.
    Senator Thomas. But they then have to be supervised by 
somebody there who is trained, so they're not implementing, 
they're not----
    Mr. Hagood. No, sir, they are actually supervised. We 
actually bring the park liaisons to the training and they go 
through an orientation for a day and a half as a part of that 
week-long training process that's facilitated by the National 
Park Service and SCA. And then they--the business planning 
group actually provides the ongoing technical assistance 
throughout the entire 10 weeks, along with the support of SCA 
on a park-by-park basis.
    Senator Thomas. I see. Thank you. Mr. Baekey, are you 
pretty much confined in your activity to the concession portion 
of the park projects?
    Mr. Baekey. Yes, we are, sir.
    We focus predominantly in two areas. We support the Park 
Service in the analysis and development of prospectuses that 
get issued for opportunities within the parks relative to 
concessions. And we also provide broader advisory services to 
the Washington office on unique issues or problems that they're 
facing.
    Senator Thomas. I see. Do you see the implementation of 
your suggestions on the ground?
    Mr. Baekey. No question. As we look toward the contracting 
side, the prospectus development side of the work that we 
assist the Park Service with, clearly there is evidence that 
suggests that a lot of the tools and the templates that we have 
developed in the due course of our work are now being employed 
by concession managers in regions and in some of the larger 
parks. There are a number of training exercises that we have 
also given, and we find that when we visit some of the parks, a 
lot of those training binders in some of the concession 
managers' offices.
    So we are starting to see the existence and the 
implementation of some of the processes that we've developed. 
There's still quite a bit of work to do. The business of 
concessions is pretty complex.
    Senator Thomas. And different, isn't it?
    Mr. Baekey. Very different, sir.
    Senator Thomas. In every situation.
    Mr. Baekey. Very different.
    Senator Thomas. I understand that. You're not responsible 
for oversight then?
    Mr. Baekey. No. We act as a service provider to the Park 
Service. We have been in discussions with them on a couple of 
different occasions about project management roles, with some 
other contractors that may not be as familiar with the process. 
We do get involved to varying degrees within that role, but for 
the most part, we are a service provider to the Park Service in 
the area of concessions.
    Senator Thomas. Senator.
    Senator Salazar. Thank you, Mr. Chairman, and thank you for 
your continuing leadership of this committee and of our 
involvement with the National Park Service. I have just a few 
questions. First, it's Sheaffer or Shieffer? Sheaffer?
    Mr. Sheaffer. Sheaffer.
    Senator Salazar. Sheaffer, with an A. I know we have 
approximately 400, 388 units within the National Park Service, 
and I assume that we're applying the scorecard not only to the 
national parks, but also to the national monuments and the 
other units within the Park Service. My question to you is, 
one, am I accurate in that assumption that it's more than just 
the parks, it also includes the monuments?
    And then second is, what is the status of the completion of 
the national scorecard? If I were to go to all my parks and 
monuments in Colorado, for example, could we have a report on 
the status of completion of the scorecard with respect to each 
of those parks?
    Mr. Sheaffer. Senator, first of all, it applies to all 
programs in the National Park Service, and I have to be clear 
on one point, it is still under development. We're still 
testing the metrics and the measures. We're still doing some 
statistical sampling. We have people in the field who are 
seeing about the application of all of these measures.
    We can run a scorecard, if you will, we can run these 
metrics against any one part. They tend not to be as useful 
until employed in comparison or over time, and so far we've 
found that the best application is in reviewing annual 
budgetary increases where a park superintendent comes in and 
with the good graces of Congress we are given some additional 
resources. We look at an increase request and we look at it and 
use these metrics to see how it measures up, say, to other 
priorities in the National Park System. We look at how 
efficient the park is, how much overhead they have relative to 
other areas, how their workload compares per dollar to other 
park areas, and that helps us evaluate more effectively. But, 
yes, we can run the numbers on all of these. But as I said, 
they tend to be more meaningful when put on a spectrum and 
compared to other parks and programs.
    Senator Salazar. What is the timing for you to be able to 
have that national scorecard completed and for us to be able to 
look at the whole system?
    Mr. Sheaffer. I'm going to say that at this point I'm 
hoping to have it far more refined by the fall than it is now, 
and to that point where we can see where those parks fall on 
that spectrum for all of these metrics, sometime this fall. We 
have contractors helping us and we're using a contractor, not 
Pricewaterhouse in this case, that is helping us develop some 
of these metrics. So that's when I would hope to have it in a 
more refined way that would lend itself to the kind of review 
that you're talking about.
    Senator Salazar. I think it would be useful for this 
committee, and, Mr. Chairman, would particularly--I know I 
would have an interest in seeing the results of that survey 
nationally, as well as the results of that survey with respect 
to the nine parks units we have within the State of Colorado.
    This is a question for Mr. Hagood. I know you work with 
about 600 people in my State who help out with the Park Service 
there. If you look back at the history of the involvement of 
volunteers with the National Park Service, can you give us a 
sense of how those trends have gone? Are we getting more 
volunteers, are we getting less volunteers? If you look back 10 
years, what are the trends?
    Mr. Hagood. That's actually a good measure for me to give a 
look at. I have actually been working with the Student 
Conservation for 10 years, and in that role have watched the 
growth over that period of time with a steady increase of 
volunteers, certainly not just from the Student Conservation 
Association, but from other not-for-profits, many of the 
conservation service groups nationally. You have some very 
highly recognized ones within your State that provide a lot of 
service volunteers--Outdoor Colorado would be an example--and a 
number of the youth corps that work on the public lands of 
Colorado.
    But there has been a steady and incremental increase over 
the last decade of the number of volunteer service hours 
provided in partnership with the National Park Service. The 
Student Conservation Association growth within that period has 
been enhanced through the Public Land Corps Initiative, whereby 
fee revenues are provided as a source of support in 
partnership, and then we match those dollars with dollars as a 
not-for-profit to provide opportunities for leading volunteers 
in parks, for bringing youth to parks, and certainly some of 
the other disciplines outside--or in addition to the business 
plans, whether that be interpretive in visitor services, 
certainly in the maintenance arena where we have conservation 
service crews doing trail restoration, as well as the work that 
we do in terms of both structures for historic parks in even 
addressing some of the prioritization within the--in the 
backlog.
    Senator Salazar. Can you quantify what the increase has 
been in volunteer participation in some of these activities 
over the last 10 years? I mean, you're telling me they're 
trending up.
    Mr. Hagood. Yes, sir.
    Senator Salazar. But do you have a sense of what that 
increase has been?
    Mr. Hagood. Yes, sir. I would say that on the number of 
volunteer service hours--and I'll just be able to speak to my 
organization alone--when I started at the Student Conservation 
Association, we were probably averaging about 750,000 volunteer 
hours per annum. We are now at 1.25 million per annum.
    Senator Salazar. That's impressive. Mr. Hagood, let me ask 
you this question. Other members of the panel can jump in as 
well. In one of my prior lives, I oversaw the Division of State 
Parks. I was Colorado director of the Department of Natural 
Resources, and State parks were one of my divisions. One of the 
things that I created during my tenure at the Department was a 
program called the Youth and Natural Resources Program. That 
program, over its 10 years of existence, brought in about 5,000 
young people, mostly of high school age, to work out in parks 
facilities and also the other divisions of the Department, 
wildlife and water, all the rest of the divisions.
    And the idea was to expose young people of diverse 
backgrounds to the opportunities that existed in parks and 
outdoor recreation kinds of careers. It was a very successful 
program in Colorado. Do we have a similar kind of program that 
aims at young people within the Park Service?
    Mr. Hagood. Yes, sir. There are three different elements 
that are directed toward youth, and I'm referring now to, shall 
we say, high school youth to early college age youth. Certainly 
the first would be the Park Service's YCC or Youth Conservation 
Corps program. Annually they provide opportunities for youth in 
all national park units to come to the park to work for a 
summer on conservation service projects.
    In addition to that, the National Park Service, through its 
partnering efforts under its partnership initiative, is also 
working with organizations like the Student Conservation 
Association and the National Organization of Service and 
Conservation Corps, approximately 150 of those nationally, to 
bring youth into the parks, jurisdiction--I mean, State by 
State, or in close proximity to parks. For example, within the 
State of Colorado, you would have the youth corps there that 
would be at the closest park site, that would be the way that 
it would be done. Here, locally, we work in all 14 of the 
national park units. I currently have approximately 100 youth 
working in national parks today, right here within the national 
capital region in an urban setting. But we have just as many 
resources for placing youth in national parks, national 
forests, and fish and wildlife refuges throughout the United 
States.
    The third element would be the ongoing local opportunities 
that are done case by case with units using outreach to local 
not-for-profits to bring youth on board within that arena.
    Senator Salazar. Let me ask you a follow-up question, and 
anybody else can jump into this that has some knowledge. Talk 
to me about the diversity of the people that you have within 
the different volunteer groups, especially with the young 
people. One of the issues that I found in Colorado was that we 
were not getting many people from African-American backgrounds 
to participate in our program, so we had a very specific 
outreach effort to try to get young people from the African-
American community to participate. So as you carry out the 
diversity initiatives of your non-profit or within the 
Department, are we able to achieve diversity within the 
representation of these young people we have working within our 
facilities?
    Mr. Hagood. Well, I can only speak to the Student 
Conservation Association's effort within this arena, and also 
my degree of knowledge about the National Parks Conservation 
Association and its work within the same area.
    Both organizations have collaborated with the National Park 
Service to enhance its ability for outreach in the 
inclusiveness of youth of diverse backgrounds having these 
kinds of opportunities nationally. Approximately 30 percent of 
all of the youth placed by the Student Conservation Association 
are of diverse backgrounds, and that is done from a national 
recruitment effort. Also, we use the fact that we have offices 
located in seven cities that can really reach out into urban 
communities and to connect those youth to those opportunities. 
And those youth can stay local or go national in terms of the 
programming that we provide.
    I also know that the National Parks Conservation 
Association also provides that opportunity, and I'll defer to 
Tom on the specifics of that. But we work collaboratively with 
the National Park Service to do that.
    And one last point, we are currently in consultation with 
the National Park Service to assist in future efforts on the 
recruitment and diversity as well.
    Senator Salazar. Thank you. And I'll have just one more 
question, Mr. Chairman, if I may. And, Mr. Kiernan, you can 
follow up on this question as well. I'm a co-sponsor, along 
with Senator Alexander and others, of the Centennial Act. And 
my question to you is, if we are successful in getting the 
Centennial Act passed, how will that impact your particular 
program and your efforts?
    Mr. Kiernan. If the act is passed, most importantly, we 
believe it will dramatically improve the parks, both the 
protection of the resources and the visitor experience in the 
parks, and give the Park Service the funds to most efficiently 
manage both the parks and the business plan program. So the 
Centennial Act we see as a means, frankly, of preparing the 
National Park System for its second century, starting in 2016. 
It is a means of giving the parks both the funds and the 
management expertise to meet its full set of obligations.
    Two additional comments back on the diversity program, just 
a summary comment. As Mr. Hagood mentioned, we have, over the 
years, had a series of diversity programs and efforts to assist 
the Park Service in both diversifying itself and in increasing 
diversity of visitors to the national parks.
    I did also want to make one additional comment. You were 
asking about the growth in volunteers. If I can broaden that, 
there has been, thank goodness, over the last many years, a 
growth in volunteers and a growth in philanthropy with the 
national parks, and that is of significant importance to the 
parks, significant benefit to the parks. Thank goodness for 
both the volunteers and the private dollars.
    However, it is important to note, and perhaps worthy for 
the committee to more deeply understand, some of the 
ramifications that ripple from the increased volunteers and 
private philanthropy. Obviously there is an impact of the Park 
Service needing to change how they do their work, a lot of 
which is positive, but there are ramifications. And so it's 
worth just understanding. And, once again, thank goodness for 
the volunteers and the private philanthropy, but they need to 
be knit with what the Federal Government is doing, what 
Congress is providing, especially when you look at the dollar 
side of it. There is a correlation between----
    Senator Salazar. Is that happening now, Mr. Kiernan, where 
you see that knitting taking place?
    Mr. Kiernan. In some ways it's positive. In all candor, we 
hear of some situations where there are some private 
philanthropists that might be giving money to the parks that 
deeply worry--and I'm not saying this is true or not, but worry 
that if they provide X number of dollars to the park, the Park 
Service or Congress may pull, if you will, X number of dollars 
away from that park. So there is a concern that that might be 
happening. So there is a correlation and it's worth 
investigating.
    Senator Salazar. Excuse me, Mr. Sheaffer. In the national 
scorecard that's being developed and in the matrix, is that 
factor accounted for somehow in the scorecard that if you get a 
philanthropic contribution to a park, that it somehow doesn't 
end up punishing the park.
    Mr. Sheaffer. No, no, to the contrary. The increased use of 
volunteers, increased use of partnership is seen as a positive 
and a good management, an indication of quality management, and 
that is to be rewarded. That's very clearly a direction I have 
from Director Mainella, and it's one that is a part of the 
scorecard.
    I understand the fear, the offset fear, and the same would 
be true of the Centennial funding. There's always the fear when 
new fees come our way, when new revenues come our way. The 
concern is that they're going to be offset. I can tell you that 
in the new revenues and sources we've had given to us, there's 
been no direct offset of any of those funds. But I understand 
the concern of those on the outside, and I suppose it's a 
logical concern for some people to have.
    Mr. Kiernan. And if I may just add, the positive side of 
all of that, I believe, is there is the potential, frankly, to 
increase on both sides and have the private sector and Congress 
both step forward, hand in hand, to meet the full needs of the 
parks and, frankly, the Centennial Act envisions that as well. 
And I think, if well choreographed, we can increase on both 
sides and meet the full needs.
    Senator Thomas. We have to thank you. We've got a buzzer 
ringing over there, Senator. We have to make sure we get the 
message out to people that the demands are greater on the 
parks. We're having more responsibilities in the parks, and 
therefore, funding has to be recognized on that basis.
    Just in closing, I hope we have plans beyond the business 
plan and kind of what the future of parks need to be, so we 
have some idea of where we're going over time and what the 
needs are there. I hope we're able to have business software 
available to be able to implement these plans and people able 
to do that.
    We certainly need to get the business plan and the 
financial plan integrated into the total park planning in the 
future, because it is part of it. And I hope the deferred 
maintenance and so on is also part of the plan, because that's 
part of it. But I understand. I guess I'm very impressed with 
what has happened over the last less than 10 years in terms of 
moving forward with the business plan and the approach to it. 
It's not complete, it takes time, and there's an awful lot of 
things to do. But it's a good program and I think it will be 
even more important as dollars grow tighter and you have more 
demands through numbers and through visitors and all these 
things.
    So I do believe, however, that the Park Service has been 
committed to doing this, and I'm impressed with that. And I 
know sometimes it's hard to implement new things in a large 
agency and get it down on the ground, and so we need to do 
that. The National Park Conservation Association has been a key 
in getting this going, and we certainly appreciate the 
leadership that has been done there. The training and the 
volunteers is something that's very important, and whether it's 
little park rangers or whatever, all those things are 
important. And I'm especially pleased that we have commercial 
business people who are in the business being called upon to 
help advise where we need to be on this, because most of us 
understand that in the past most of the people in the Park 
Service, that hasn't been their direction and training and 
shouldn't have been, they're doing other things. But this also 
becomes a bigger part of it.
    So I think the reason for this hearing was to kind of get 
an update on where you think we are, and then as we go forward, 
what needs to be done here to implement what you're doing, and 
certainly we want to continue to communicate with you in that 
regard. So thank you very much for being here. Thank you for 
your input, and we look forward to working with you in the 
future. The committee is adjourned.
    [Whereupon, at 3:18 p.m., the hearing was adjourned.]

                                APPENDIX

                   Responses to Additional Questions

                              ----------                              

                        Department of the Interior,
           Office of Legislative and Congressional Affairs,
                                Washington, DC, September 12, 2005.
Hon. Craig Thomas,
Chairman, Subcommittee on National Parks, Committee on Energy and 
        Natural Resources, U.S. Senate, Washington, DC.
    Dear Mr. Chairman: Enclosed are responses to the follow-up 
questions from the oversight hearing on the National Park Service's 
business strategies held by the Subcommittee on National Parks on July 
14, 2005. These responses have been prepared by the National Park 
Service.
    Thank you for giving us the opportunity to respond to you on these 
matters.
            Sincerely,
                                             Jane M. Lyder,
                                               Legislative Counsel.
[Enclosure.]
                     Questions From Senator Thomas

                   COST OF DEVELOPING BUSINESS PLANS

    Question 1a. How much has the National Park Service spent to 
prepare business plans during the past 5 years?
    Answer. During each of the past 5 years, the National Park Service 
(NPS) has incurred direct costs of approximately $375,000, or about 
$35,000 per developed plan. About $175,000 is for the stipends paid to 
the management consultant interns; about $90,000 is spent for 
contractual support, including the automated system used to standardize 
and archive business plan data; and, about $110,000 is used for 
training, review sessions, travel, and the printing of the training 
materials and the final plans.
    Question 1b. Can you show a direct savings that may not have 
occurred without the development and implementation of business plans?
    Answer. At Santa Monica Mountains National Recreation Area (NRA), 
savings involved reductions in identified needs, revenue generation, 
and implementing management efficiencies, all resulting from its 
successful implementation of 27 of 33 investment strategies and half of 
the operational strategies identified in its Business Plan. As a 
result, the park was able to redirect staffing and cost savings to 
close gaps in required needs. Our 2003 Business Plan analysis shows we 
reduced the gap by 11%, resulting in $1.6 million in increased 
management effectiveness and services.
    Question 1c. Has the investment in business plans been worthwhile 
and should it continue?
    Answer. We estimate the cumulative tangible benefit from the 
investment in business plans over the last 5 years to be in excess of 
$5 million dollars. One of the greatest impacts that business plans 
have is getting parks to refine their view of their needs and 
prioritize them so that each dollar brought in will have the greatest 
possible net benefit. We also believe that this program has been 
worthwhile, as it exposes NPS field managers and their core teams to 
the highest caliber of business management practices and analysis from 
an independent perspective. The continuation of this program is an 
essential part of our workforce planning for developing business acumen 
and for developing future leaders with a strong background in financial 
management.
    Question 2. Which National Park would you say has the best business 
approach to operations, maintenance and visitor services? What makes it 
so good?
    Answer. Among parks that have completed the business plan program, 
Santa Monica Mountains NRA has been very successful in implementing new 
strategies and developing efficient operations based on its plan. 
Additionally, the park's management is continually on the lookout for 
new ideas and methods, and accepts change willingly. The leadership is 
dynamic, takes chances, and manages the work with a high degree of 
professionalism.
    Question 3. In addition to business plans, what has the National 
Park Service done to promote a business approach for operating and 
maintaining the national park system?
    Answer. The NPS has pioneered several new tools for promoting 
private-sector management concepts: the NPS Scorecard, Asset Condition 
Assessments, the Budget Cost Projection Module, and the Core Operations 
Analysis. In addition, new developments in the Concessions Management 
program, such as using non-appropriated dollars for contract oversight, 
are also assisting the NPS in managing operations in a more business-
like manner.

                           THE NPS SCORECARD

    The Scorecard, which is being developed under the leadership of the 
NPS Comptroller, will consist of two key elements. First, NPS will 
utilize a four-part set of metrics (where applicable) including 
background information for each park, descriptive information, 
efficiency measures, and performance measures. Second, in order to 
ensure that the Scorecard is used to measure performance of similar 
parks, the units of the national park system will be stratified and 
grouped along three parallel lines--one based on the park's annual 
operating budget and Full-Time Equivalent (FTE) usage, one based on the 
park's ``business model,'' and one based on the park's region. The six 
``business model'' categories are: Multi-Service Provider Parks, 
Entrepreneurial Parks, Resource Preservation Parks, Partnership Parks, 
Focused-Service Provider Parks, and Visitor Services Parks.

             ASSET MANAGEMENT THROUGH CONDITION ASSESSMENTS

    The NPS is conducting annual and comprehensive condition 
assessments in parks. We are on track to complete the first cycle of 
comprehensive condition assessments by the conclusion of FY 2006. When 
collected, the information is loaded into the Facility Management 
Software System (FMSS), so it is easily accessible and can support 
daily decision-making.
    The NPS uses two industry-standard measurements for its assets: the 
API, which assigns a priority rating to an asset in relation to its 
importance to the park mission, and the FCI, which quantifies the 
condition of a structure by dividing the deferred maintenance backlog 
of a facility by the current replacement value of the same facility. 
Using the API and the FCI to manage an asset through its life cycle 
maximizes the productivity of operations and maintenance funds applied 
against assets. This business approach to asset management will assist 
the NPS in determining which facilities are necessary for the mission 
and which could be excised from the inventory. It will also allow the 
NPS to prioritize assets for receiving immediate and long-term care.
    With regard to transportation assets within parks, the NPS works 
with the Federal Lands Highway Program to collect inventory and 
condition data through the NPS Road Inventory Program and Bridge 
Inspection Program. Monitoring and reporting on system performance and 
conditions over time is essential for implementing transportation asset 
management. For basic preservation, operations, and capacity expansion 
decisions, condition data can be used to assess facility condition, 
predict long-term preservation needs, and estimate maintenance and 
repair schedules.

                     BUDGET COST PROJECTION MODULE

    The Northeast Region and the Accounting Operations Center developed 
the Budget Cost Projection Module (BCP), a tool designed to provide 
Park Management, Regional Offices and the NPS Comptroller with 
financial information regarding the future costs of their operating 
units. The BCP tool allows organizations to project future operational 
requirements and costs over five years. This tool utilizes baseline 
information in parks' financial execution plans to formulate future 
costs for labor and non-labor expenses. Additionally, this tool 
anticipates the level of future funding available to meet these 
requirements based on parks' historic allocations. It provides managers 
the flexibility to modify these details to plan for alternate operating 
scenarios within these constraints.

                        CORE OPERATIONS ANALYSIS

    Over the past two years, the Intermountain Region has developed and 
implemented the Core Operations Analysis program, designed to assist 
park management in making fully informed decisions on staffing and 
funding alternatives that tie to core mission goals. The process can 
also be considered as a precursor to other management planning efforts 
such as competitive sourcing and business plan development. The intent 
of the process is to ensure funds are spent in support of a park's 
purpose and in an efficient manner, that a park's request for funding 
is credible and, most importantly, that there are adequate funds and 
staff for the tasks appropriate to conserve and protect a park's 
resources. Each Core Operations Analysis is expected to result in the 
park's ability to reallocate the equivalent of 10 percent of base funds 
to more essential activities and high-priority goals, and to work 
toward the following within one year of the analysis:

   Ensuring staffing costs will be equal to or below 80% of 
        operating base funds;
   Completing cost/benefit analysis of efficiencies and 
        implement those feasible;
   Evaluating current requests in the NPS Operations 
        Formulation System (OFS) in relationship to park goals to 
        ensure the OFS requests relate to activities that are 
        demonstrably essential and important; and
   Determining opportunities for competitive sourcing.

    The NPS is beginning the process of making this management tool 
available Servicewide. The planned accomplishments of this program in 
FY 2005 are: analyses in 32 parks in the Intermountain Region and one 
park each in the Southeast, National Capital, and Northeast Regions; 
analyses of the Intermountain Regional Office and of the Office of the 
Associate Director for Administration; and, the training of 
facilitators in the Regional and Washington offices to conduct future 
analyses.
    Question 4. Has the National Park Service developed written 
guidelines for promoting business practices? Are concessioners and 
commercial operators encouraged or required to follow the guidelines? 
Please provide a copy of the business plan guidelines for the record.
    Answer. The NPS Scorecard, the Budget Cost Projection Module, the 
Core Operations Analysis, the Facility Management Software System, and 
the Business Plan Initiative are all tools being used to promote the 
use of better business practices by all NPS managers. The NPS also has 
several sources of detailed written guidance, including the 2001 
Management Policies, supplemented by staff directives, special 
directives, and numbered guidelines. The NPS is updating the Management 
Policies and is currently revising and rewriting these supplemental 
materials so that they conform to the new NPS Directives System, which 
consists of Director's Orders, Handbooks and Reference Manuals, in 
addition to Management Policies.
    Regarding concessioner business practices, the NPS has guidelines 
for operations and maintenance practices contained within each 
concessioner's contract. These guidelines are reviewed on a yearly 
basis by the park and the concessioner, and changes are made as 
appropriate. The NPS Concession Program is working closely with the 
concession community to establish a Standards, Evaluation and Rate 
Approval Program that will further define business practices and set 
standards based on private-sector business practices for all types of 
concession operations. Once in place, these revised standards will be 
incorporated into new contracts and will ensure more consistent 
business practices System-wide.
    The 2005 Business Plan Training Manual, which contains the 
program's guidelines, is attached.*
---------------------------------------------------------------------------
    * Retained in subcommittee records.
---------------------------------------------------------------------------
    Question 5. The business plan initiative has established a baseline 
for over 70 parks throughout the National Park System over the past 
nine years. Has a comprehensive review of the business plan initiative 
been conducted for trends analysis? Is it feasible to expect to 
complete business plans for all parks?
    Answer. The NPS Business Planning process is being refined and 
improved on an ongoing basis. Business plan data is aggregated and 
trends are analyzed each year. A survey form is used to solicit 
feedback from the participating park staff and the summer consultants. 
In addition, each year the NPS Business Planning Office reviews the 
summer efforts and incorporates all feedback into system and 
performance improvements for the next year. As a result, each year, 
final business plans are stronger.
    The overall content of business plans has also expanded to respond 
to NPS leadership requests for additional information in the last few 
years. As a result, the Business Planning Office is participating in 
other financial management initiatives, including the NPS Scorecard, 
the Budget Cost Projection Module, and Core Operations Analysis, 
ensuring data consistency throughout these financial management tools, 
as well as encouraging the sharing of best practices among offices.
    It is possible to complete a business plan for any unit of the 
National Park System. However, due to Business Planning Office staff 
time required for program oversight, NPS can only complete 
approximately 12 per year at the present time.
    Question 6. The Parks Scorecard has been highly praised by Director 
Mainella and promises to be a helpful management tool service wide. 
When is full implementation of the scorecard expected?
    Answer. The NPS aims to have an improved, comprehensive Scorecard 
developed by October, 2005. The initial gathering of information, 
efficiency, and performance measures for each park was recently 
completed, and NPS staff is collaborating with consultants to enter the 
data into a centralized database. The next phase involves performing 
statistical analysis of the data and establishing banding criteria for 
each measure (i.e. High, Medium, Low ``scores'').
    The Scorecard data will be tested extensively in parks that are 
undergoing the Business Plan process in order to leverage the financial 
expertise of Business Plan consultants at those parks. Two Regional 
Offices will also be involved in the testing of Scorecard measures. 
More testing in additional parks and Regions may be done if time 
permits. After testing has been completed, it is anticipated that some 
measures will be revised or removed and additional measures added.
    The next phase will involve developing the Scorecard database to be 
more ``user friendly'' for the Regional and Washington Office managers 
who use the data. This involves establishing baselines for each 
measure, establishing benchmarks for park management and performance, 
and stratifying/grouping the units of the national park system so users 
can compare scorecard measures for similar parks. System development 
will most likely take the majority of FY 2006.
    Question 7a. In your testimony you state that the Natural Resource 
Stewardship and the National Historic Preservation Programs received 
PART scores of 83 percent and were deemed moderately effective.
    Please provide copies of the full PART evaluation to the committee 
for the record.
    Answer. Copies of the full Program Assessment Rating Tool (PART) 
evaluations for the Natural Resource Stewardship and National Historic 
Preservation Programs are attached?`
    Question 7b. What recommendations does the PART suggest to make 
these programs highly effective?
    Question 7c. What are the NPS plans to implement these 
recommendations?
    Answer. The OMB PART recommendations for these two programs are as 
follows:

                    NATURAL RESOURCE STEWARDSHIP PART
------------------------------------------------------------------------

------------------------------------------------------------------------
1.0.............................  OMB Recommendation  Continue the
                                                       commitment to
                                                       gradual funding
                                                       increases for the
                                                       Natural Resource
                                                       Challenge.
2.0.............................  OMB Recommendation  Report on the
                                                       first group of
                                                       parks that have
                                                       identified vital
                                                       signs to show how
                                                       each park can use
                                                       these measures to
                                                       provide an
                                                       overview on the
                                                       health of its
                                                       ecosystem.
3.0.............................  OMB Recommendation  Refine efficiency
                                                       measures and use
                                                       them to identify
                                                       best practices,
                                                       such as the most
                                                       cost-effective
                                                       ways to treat
                                                       lands disturbed
                                                       with exotic
                                                       plants.
4.0.............................  OMB Recommendation  Integrate existing
                                                       performance
                                                       measures into the
                                                       Department of the
                                                       Interior's
                                                       overall strategic
                                                       plan.
5.0.............................  OMB Recommendation  Determine a
                                                       process and
                                                       schedule for an
                                                       independent
                                                       evaluation of the
                                                       program.
------------------------------------------------------------------------

               NATIONAL HISTORIC PRESERVATION PROGRAM PART
------------------------------------------------------------------------

------------------------------------------------------------------------
1.0.............................  OMB Recommendation  Continue work with
                                                       State Historic
                                                       Preservation
                                                       Officers (SHPOs)
                                                       to collect and
                                                       report
                                                       performance
                                                       information.
2.0.............................  OMB Recommendation  Use more
                                                       performance data
                                                       in budget
                                                       requests.
3.0.............................  OMB Recommendation  Examine ways to
                                                       measure and
                                                       improve program
                                                       cost-
                                                       effectiveness.
4.0.............................  OMB Recommendation  Determine a
                                                       process and
                                                       schedule for an
                                                       independent
                                                       evaluation of the
                                                       program overall.
------------------------------------------------------------------------

    NPS has implemented some of these recommendations and is working 
towards completing others.
    Question 9a. Your testimony states that the NPS continues to work 
with OMB to develop performance measures for programs that have 
insufficient or inappropriate metrics in place.
    Which programs are these?
    Answer. Upon completion of the 2003-2004 NPS PART program 
evaluations, OMB presented recommendations to improve the performance 
measures for the six programs that went through the review. Those 
programs are:

   Facility Management (RePart) (2003)
   LWCF Stateside Grants (2003)
   National Historic Preservation Program (2003)
   Natural Resource Stewardship (RePart) (2003)
   Cultural Resource Stewardship (2004)
   LWCF Land Acquisition (2004)

    Question 9b. What is the time line for full PART evaluation of 
these Programs?
    Answer. The NPS continues to work with OMB to implement 
recommendations, seeking improvements in performance measures. No 
follow-up PART reviews of any previously reviewed programs are planned 
at this time.
    In 2005 the following programs are going through the PART process:

   Concessions Management
   External Programs--Technical Assistance
   External Programs--Financial Assistance (Heritage 
        Partnership Program)
   Visitor Services

    These programs are still in the OMB evaluation process. They are 
expected to be completed by January and will be made available with the 
FY 2007 Budget.
    Question 9c. As the PART evaluations are completed please provide a 
copy to the committee.
    Answer. Copies of the 2005 PART Program evaluations will be 
provided to the committee upon completion.
    Question 10. Your testimony provided several outstanding examples 
of success stories from the competitive review process and described 
ongoing competitive review efforts, with efforts continuing at five 
areas begun in 2004 and three studies beginning this year. Please 
provide an update of the review process for each unit conducting 
reviews.
    Answer. The competitive review process that began for five areas in 
FY 2004 has been completed for three areas: Golden Gate National 
Recreation Area maintenance functions, Intermountain Region Cultural 
Resource Management, and Great Smoky Mountains National Park 
maintenance functions. In each case, the existing organization was 
reshaped into a most efficient organization (MEO), which was then 
implemented. Therefore, those functions were not competed.
    With regard to the two other areas begun in FY 2004, New York 
Harbor Parks recently formed an MEO, and National Mall and Memorial 
Parks, by the end of October, 2005. In each case, after that occurs, 
the NPS Director will decide whether to implement the MEO or to proceed 
with the competitive review process.
    The preliminary planning effort is just beginning for the three 
park areas designated for review in FY 2005. The review for Indiana 
Dunes National Lakeshore began in July; the review for San Juan 
National Historic Site began in August; and the review for Boston 
National Historical Park started in September.
    Question 11. What level of integration occurs across the numerous 
business software tools utilized by the service?
    Answer. As the business tools are being developed and expanded, the 
NPS is exploring ways to combine or integrate the processes. Currently, 
the Budget Cost Projection module is part of the Administrative 
Financial System (AFS3), the NPS tool for managing its budget and 
financial information at working levels. The Budget Cost Projection 
module has also become an integral portion of the Core Operations 
Analysis initiative. As Core Operations is expanded for Servicewide 
use, it is being adapted to incorporate the Scorecard and applicable 
Regional/Servicewide procedures and policies. Eventually, Core 
Operations will become part of the Business Plan process.
    The Park Scorecard is also undergoing considerable revision. The 
new measures will be tested at parks undergoing the business planning 
process this summer. Many of the measures derive and manipulate data 
from AFS3, the Facility Maintenance Software System (FMSS), and the 
Performance Management Data System (PMDS). Once the Scorecard criteria 
and data have been tested, the information will be incorporated in the 
NPS Operations Formulation System (OFS), which is the repository for 
unfunded operational needs for the Service.

                     Question From Senator Salazar

    Question 1. I understand that the National Scorecard has not been 
fully compiled yet and that the regional office in Denver has had a 
good amount of input on its formulation. If you are aware of any 
initial results from parks in my home state of Colorado would you be 
willing to supply my office with that information? And secondly, when 
do you plan on issuing the final Scorecard?
    Answer. The NPS aims to have a fairly comprehensive list of 
indicators for the Scorecard developed by October, 2005. Additional 
system development will continue throughout FY 2006, in order to make 
the scorecard database more ``user friendly'' for Regional and 
Washington Office managers.
    The NPS is gathering prototype information for parks in Colorado. 
However, this data is in draft form. The Scorecard project coordinator 
is in the Denver area and is planning to test draft information at our 
Intermountain Regional Office in Denver. We would be happy to provide 
more information on Colorado parks as we move further along in this 
process.

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