90098 Federal Register / Vol. 88, No. 249 / Friday, December 29, 2023 / Rules and Regulations 

that may result in the expenditure by a 

State, local, or Tribal Government, in 

the aggregate, or by the private sector of 

$100,000,000 (adjusted for inflation) or 

more in any one year. Though this rule 

will not result in such an expenditure, 

we do discuss the effects of this rule 

elsewhere in this preamble. 

F. Environment 

We have analyzed this rule under 

Department of Homeland Security 

Directive 023–01, and Environmental 

Planning, COMDTINST 5090.1 (series), 

which guide the Coast Guard in 

complying with the National 

Environmental Policy Act of 1969 (42 

U.S.C. 4321–4370f) and have 

determined that this action is one of a 

category of actions that do not 

individually or cumulatively have a 

significant effect on the human 

environment. This rule is categorically 

excluded from further review under 

paragraph L60(a) of Appendix A, Table 

1 of DHS Instruction Manual 023–01– 

001–01, Rev. 1. A Record of 

Environmental Consideration 

supporting this determination is 

available in the docket. 

G. Protest Activities 

The Coast Guard respects the First 

Amendment rights of protesters. 

Protesters are asked to contact the 

person listed in the FOR FURTHER

INFORMATION CONTACT section to 

coordinate protest activities so that your 

message can be received without 

jeopardizing the safety or security of 

people, places or vessels. 

List of Subjects in 33 CFR Part 165 

Harbors, Marine safety, Navigation 

(water), Reporting and recordkeeping 

requirements, Security measures, 

Waterways. 

For the reasons discussed in the 

preamble, the Coast Guard amends 33 

CFR part 165 as follows: 

PART 165—REGULATED NAVIGATION 

AREAS AND LIMITED ACCESS AREAS 

■ 1. The authority citation for part 165 

continues to read as follows: 

Authority: 46 U.S.C. 70034, 70051, 70124; 

33 CFR 1.05–1, 6.04–1, 6.04–6, and 160.5; 

Department of Homeland Security Delegation 

No. 00170.1, Revision No. 01.3. 

■ 2. Add § 165.T08–0961 to read as 

follows: 

§ 165.T08–0961 Safety Zone; Laguna 

Madre, South Padre Island, TX. 

(a) Location. The following area is a 

safety zone: all navigable waters of the 

Laguna Madre encompassed by a 700- 

yard radius from the following point; 

26°6′02.1′′ N, 97°10′17.7′′ W. 

(b) Enforcement period. This section 

is in effect, and subject to enforcement, 

from 9 p.m. on December 31, 2023, 

through 1 a.m. on January 1st, 2024. 

(c) Regulations. (1) According to the 

general regulations in § 165.23 of this 

part, remaining in, or entry into this 

temporary safety zone are prohibited 

unless authorized by the Captain of the 

Port, Sector Corpus Christi (COTP) or a 

designated representative. They may be 

contacted on Channel 16 VHF–FM 

(156.8 MHz) or by telephone at 361– 

939–0450. 

(2) If permission is granted, all 

persons and vessels shall comply with 

the instructions of the COTP or 

designated representative. 

(d) Information broadcasts. The COTP 

or a designated representative will 

inform the public of the enforcement 

times and date for this safety zone 

through Broadcast Notices to Mariners, 

Local Notices to Mariners, and/or Safety 

Marine Information Broadcasts as 

appropriate. 

Dated: December 22, 2023. 

Jason Gunning, 

Captain, U.S. Coast Guard, Captain of the 

Port, Sector Corpus Christi. 

[FR Doc. 2023–28756 Filed 12–28–23; 8:45 am] 

BILLING CODE 9110–04–P 

DEPARTMENT OF THE INTERIOR 

National Park Service 

36 CFR Part 51 

[NPS–WASO- 36913; PPWOBSADC0; 

PPMVSCS1Y.Y00000] 

RIN 1024–AE57 

Commercial Visitor Services; 

Concession Contracts 

AGENCY: National Park Service, Interior. 

ACTION: Final rule. 

SUMMARY: The National Park Service 

revises regulations that govern the 

solicitation, award, and administration 

of concession contracts to provide 

commercial visitor services at National 

Park System units under the authority 

granted through the Concessions 

Management Improvement Act of 1998 

and the National Park Service 

Centennial Act. The changes reduce 

administrative burdens and expand 

sustainable, high quality, and 

contemporary concessioner-provided 

visitor services in national parks. 

DATES: This rule is effective January 29, 

2024. 

ADDRESSES: The comments received on 

the proposed rule and an economic 

analysis are available on https://

www.regulations.gov in Docket ID: NPS– 

2020–0003. 

FOR FURTHER INFORMATION CONTACT: Kurt 

Rausch, Chief of Commercial Services 

Program, National Park Service; (202) 

513–7202; kurt_rausch@nps.gov. 

SUPPLEMENTARY INFORMATION: 

Background 

Authority and Purpose 

The National Park Service (NPS) 

enters into contracts with concessioners 

to provide commercial visitor services 

in over 100 units of the National Park 

System. Examples of such services 

include lodging, food, retail, marinas, 

transportation, and guided recreation. 

Each year, concession contracts generate 

approximately $1.5 billion in gross 

revenues and return approximately $135 

million in franchise fees to the NPS. The 

National Park Service Concession 

Policies Act of 1965 (1965 Act) (Pub. L. 

89–249) provided the first statutory 

authority for the NPS to issue 

concession contracts. Since the repeal of 

the 1965 Act, concession contracts have 

been awarded under the Concessions 

Management Improvement Act of 1998 

(1998 Act), 54 U.S.C. 101901–101926. A 

revision to the 1998 Act was also 

included in section 502 of the 2016 

National Park Service Centennial Act 

(Centennial Act) (Pub. L. 114–289). NPS 

regulations in 36 CFR part 51 govern the 

solicitation and award of concession 

contracts issued under the 1998 Act and 

the administration of concession 

contracts issued under the 1965 and 

1998 Acts. The NPS promulgated these 

regulations in April 2000 (65 FR 20630) 

and since that time has made only 

minor changes to them (see, e.g., 79 FR 

58261). 

In August of 2018, as part of the 

Department of the Interior’s 

implementation of Executive Order 

13777, Enforcing the Regulatory Reform 

Agenda, and in response to a request for 

public input on how the Department of 

the Interior can improve 

implementation of regulatory reform 

initiatives by identifying regulations for 

modification (82 FR 28429), the NPS’s 

external concessions partners provided 

the Secretary of the Interior (Secretary) 

with suggestions for improving existing 

concession regulations. The Department 

of the Interior considered the 

suggestions provided by the concessions 

partners, and those suggestions are 

reflected in this rule. In addition, 

Secretary’s Order 3366, Increasing 

Recreational Opportunities on Lands 

and Waters Managed by the U.S. 


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1The NPS will specify solicitation procedures in 

policy and in instructions that will be posted on 

public-facing websites, such as the website for the 

NPS Commercial Services Program (https://

www.nps.gov/orgs/csp/index.htm). 

Department of the Interior, signed by the 

Secretary in April of 2018, directed the 

NPS to look for ways to streamline and 

improve the contracting process for 

recreational concessioners as part of the 

Department’s efforts to expand access to 

and improve the infrastructure on 

public lands and waters, including 

through the use of public-private 

partnerships. The directives set forth in 

that Secretary’s Order are intended to 

provide the public with more 

recreational opportunities and 

memorable experiences on the 

Department’s public lands and waters. 

This rule is responsive to these 

directives, suggestions received, and 

areas for improvement identified by the 

NPS. Finally, the NPS received a variety 

of comments on the proposed revisions 

to the rule during the public comment 

period including suggestions for 

additional improvements to the rule. 

The NPS considered these comments 

and has incorporated some of the 

suggestions in this final rule. 

Each of the changes to 36 CFR part 51 

is explained below and corresponds to 

the subparts of the existing regulations 

that are amended under this rule. In 

total, this final rule makes 12 changes to 

the existing regulations, which are 

numbered to assist with ease of reading. 

Some of the changes are implemented 

for new contracts, while others are 

effective for both current and new 

contracts as identified in the 

explanation for each change. The overall 

purpose of these changes is to update 

and improve the regulations governing 

concession contracts so that the public 

is better served when visiting our 

nation’s most cherished public lands 

and waters. 

Subpart C—Solicitation, Selection, and 

Award Procedures (36 CFR 51.4–51.22) 

The regulations in Subpart C set forth 

the processes and rules governing the 

solicitation, selection, and award of 

concession contracts. The NPS makes 

four changes to this subpart, as 

explained below. 

Change 1: New Concession 

Opportunities 

The NPS recognizes that the needs for 

commercial visitor services in parks 

may change over time, including the 

need to provide new services that are 

not currently provided. Recent 

examples include wireless connectivity 

services at Lake Mead National 

Recreation Area, parking management at 

Muir Woods National Monument, and 

bike rentals at Grand Canyon National 

Park. The NPS considers evolving 

visitor needs through its commercial 

services planning processes. Each unit 

of the national park system is required 

to have a park foundation document, 

that provides basic guidance for all 

planning and management decisions 

and from which the NPS develops a 

park’s planning portfolio. The planning 

portfolio is the assemblage of individual 

plans, studies, and inventories that 

guide park decision-making. For 

commercial services, these may range 

from broader planning efforts such as 

visitor use studies and commercial 

services strategies to more focused 

studies such as climbing or horse 

management plans. Commercial visitor 

services planning also occurs through 

the concession contract prospectus 

development process. During this 

process, the NPS reviews the services 

currently provided, conducts market 

studies, and may solicit public 

comments to assess new commercial 

visitor service opportunities. 

The final rule recognizes this 

planning framework by requiring the 

solicitation and consideration of 

suggestions for new concession 

opportunities. Section 51.4(c) states that 

the Director will issue a prospectus for 

a new concession opportunity when the 

Director determines that a new 

concession opportunity is necessary and 

appropriate for public use and 

enjoyment of the park area and is 

consistent to the highest practicable 

degree with the preservation and 

conservation of the resources and values 

of the park area. This standard for 

evaluating new opportunities is 

consistent with the 1998 Act. 54 U.S.C. 

101912(b)(1)–(2). Section 51.4(d) 

requires the Director to establish 

procedures to annually solicit and 

consider suggestions from the public for 

new commercial services in NPS units. 

While the regulation does not specify 

the procedures for the solicitation, the 

regulation does require the Director to 

make all proposals and the Director’s 

evaluation of them public.1 Section 

51.4(e) establishes relevant factors that 

the Director will consider when 

deciding whether to issue a prospectus 

for a new concession opportunity in 

addition to the determination that a 

commercial visitor service is necessary 

and appropriate for public use and 

enjoyment of the park area and is 

consistent to the highest practicable 

degree with the preservation and 

conservation of the resources and values 

of the park area. These factors shall 

include whether the suggested 

concession opportunities are already 

adequately provided within the unit; the 

potential for augmented resources for 

park area operations; the effects of the 

suggested concession operations on the 

park area; the sustainability of the 

suggested concession opportunities; the 

innovative quality of the suggestions; 

and the potential impacts on park area 

visitation and on communities located 

near the park area. Paragraph (f) clarifies 

that the NPS may not, during the 

competitive evaluation process, give 

preference to any party that suggests an 

opportunity that is subsequently offered 

by the NPS simply because the party 

originally suggested the idea. The 1998 

Act recognizes only two categories of 

concession contracts that provide 

preferential rights to incumbent 

concessioners. 54 U.S.C. 101913(7), (8). 

The final rule recognizes, however, that 

in some circumstances the Director may 

award a contract without competition 

under 36 CFR 51.25. Section 51.4(g) 

provides the Director discretion to 

amend an existing contract to allow a 

concessioner to provide new or 

additional services under 36 CFR 51.76. 

This preserves the authority of the 

Director to adjust the services being 

provided in response to changing visitor 

needs over the term of the contract, 

consistent with the fundamental 

business opportunity that was offered in 

the concession prospectus. Paragraph 

(h) states that nothing in the new

processes to be established by the

Director would limit the Director from

soliciting, considering, or collecting

information related to new concession

opportunities.

Change 2: Timing of Issuing 

Prospectuses 

Section 51.4(b) of the existing 

regulations states that the Director will 

not issue a prospectus for a concession 

contract earlier than 18 months prior to 

the expiration of a related existing 

concession contract. The original 

purpose of this restriction was to ensure 

that an existing concessioner would not 

have to compete for a new contract in 

circumstances where assessment of the 

feasibility of the terms and conditions of 

the new contract would be unduly 

speculative (65 FR 20637). The 

proposed rule would have eliminated 

the 18-month restriction for new 

concession contract prospectuses to 

allow the NPS the flexibility to issue a 

prospectus earlier in circumstances 

where there are unusually significant 

commitments required of potential 

offerors to acquire personal property, 

such as vessels, or to obtain financing or 

to manage reservations. The NPS 

proposed this change on the view that 


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this additional time would provide for 

more offerors, which benefits the NPS 

and the public because increased 

competition generally results in higher 

quality offers. 

Based on comments, however, the 

NPS retains the 18-month rule but 

provides an exception for when the 

Director determines releasing a 

prospectus earlier is necessary to 

provide additional time to potential 

offerors, such as when additional time 

is needed to avoid issuing a prospectus 

during a busy operating season or where 

potential offerors must make significant 

financial commitments to meet the 

requirements of the contract. Such 

additional time must be as short as 

prudent. 

Change 3: Publishing Notice of a 

Prospectus 

Section 51.8 of the existing 

regulations states that the Director will 

publish notice of the availability of a 

prospectus at least once in the 

Commerce Business Daily or in a similar 

publication if the Commerce Business 

Daily ceases to be published. The rule 

updates this provision to require 

publication in the System for Award 

Management (SAM). The rule expands 

the description of the types of electronic 

media that will be used to advertise 

opportunities to include websites and 

social media. 

Change 4: Weighting Selection Factors 

The fourth change is to § 51.16 of the 

existing regulations. Section 51.16 is 

closely related to § 51.17 of the existing 

regulations, which identifies selection 

factors that must be applied by the 

Director when assessing the merits of a 

proposal. Section 51.17(a) lists five 

primary selection factors: 

Principal selection factor 1: The 

responsiveness of the proposal to the 

objectives, as described in the 

prospectus, of protecting, conserving, 

and preserving resources of the park 

area. 

Principal selection factor 2: The 

responsiveness of the proposal to the 

objectives, as described in the 

prospectus, of providing necessary and 

appropriate visitor services at 

reasonable rates. 

Principal selection factor 3: The 

experience and related background of 

the offeror, including the past 

performance and expertise of the offeror 

in providing the same or similar visitor 

services as those to be provided under 

the concession contract. 

Principal selection factor 4: The 

financial capability of the offeror to 

carry out its proposal. 

Principal selection factor 5: The 

amount of the proposed minimum 

franchise fee, if any, and/or other forms 

of financial consideration to the 

Director. 

The Director must consider these five 

factors under the 1998 Act. 54 U.S.C. 

101913(5)(A). 

Section 51.17(b) identifies one 

secondary selection factor (secondary 

selection factor 1) and allows the 

Director to use additional secondary 

selection factors where appropriate and 

otherwise permitted by law. Secondary 

selection factor 1 is the quality of the 

offeror’s proposal to conduct its 

operations in a manner that furthers the 

protection, conservation and 

preservation of park area and other 

resources through environmental 

management programs and activities, 

including, without limitation, energy 

conservation, waste reduction, and 

recycling. The NPS may exclude this 

factor for small contracts and those 

expected to have limited impacts on 

park resources. Secondary selection 

factors are permitted, but not required, 

to be considered under the 1998 Act. 54 

U.S.C. 101913(5)(B). Although the 1998 

Act is silent on how the Director should 

weigh each factor, § 51.16 requires the 

Director to assign a score for each 

selection factor that reflects the merits 

of the proposal compared to other 

proposals received, if any. 

The final rule retains the relative 

scoring relationships of the 2000 rule 

but provides additional flexibility for 

the NPS by increasing the possible 

number of total points from 30 to 40. 

The final rule also requires that each 

selection factor used must provide for a 

maximum score of at least one point. 

Further, the final rule provides that 

secondary selection factor 1 must have 

a maximum score less than the 

maximum score for the principal 

selection factor for franchise fees and 

the aggregate score of all other 

secondary selection factors must have a 

maximum score less than the maximum 

score for the principal selection factor 

for franchise fees. The final rule also 

assigns a score of one point for agreeing 

to the prospectus franchise fee (as 

defined in § 51.78) or, when the Director 

determines use of the prospectus 

franchise fee inappropriate, the 

minimum acceptable franchise fee set 

forth in the prospectus. The proposed 

rule did not specify minimum or 

maximum points for selection factors 

and provided that the principal 

selection factor for franchise fees could 

have the same possible score as the 

other principal selection factors. The 

revisions to § 51.16 will apply to all 

prospectuses issued after the effective 

date of the final rule and will provide 

the NPS with greater flexibility to weigh 

the factors according to how important 

they are to the NPS and for the specific 

contract. 

Change 5: Adding Secondary Selection 

Factor for Consideration of New 

Services 

The final rule features the benefit of 

providing new commercial visitor 

services. For several years, the NPS 

occasionally has included a secondary 

selection factor asking offerors to 

identify ways they could add additional 

services and programs within the scope 

of the subject contract. The NPS has 

revised § 51.17(b)(2) specifically to 

provide that the Director will include 

such a secondary selection factor when 

appropriate. This revision will apply to 

all prospectuses issued after the 

effective date of the final rule. 

Subpart G—Leasehold Surrender 

Interest (36 CFR 51.51–51.67) 

The regulations in Subpart G explain 

how a concessioner can obtain 

leasehold surrender interest (LSI) in 

capital improvements to visitor service 

facilities that are made under the terms 

of a concession contract. The NPS 

makes one change to this subpart, as 

explained below under Change 6. This 

change applies to future concession 

contracts. 

The NPS manages concession 

contracts to ensure concessioners 

maintain and repair the facilities 

assigned as required under the terms of 

their contract. The NPS also seeks to 

encourage concessioners to make capital 

improvements in order to ensure 

facilities are structurally sound, 

updated, and adequate to meet the 

needs of the visiting public. When the 

NPS approves the concessioner to fund 

and construct capital improvements to 

expand, update, and rehabilitate 

facilities, the concessioner receives LSI 

for the associated costs in each capital 

improvement. The NPS considers the 

costs associated with these 

improvements, as well as the 

opportunity for receiving LSI, when it 

determines the concessioner’s 

reasonable opportunity for net profit 

and sets the prospectus or minimum 

franchise fee for the contract. The 1998 

Act outlines, in general terms, what 

constitutes a capital improvement 

eligible for LSI and how to value LSI. 54 

U.S.C. 101915. Details about which 

types of construction activities are 

eligible for LSI and how it is valued are 

found in subpart G. 

LSI is unique to NPS concession 

contracts and is not used in the private 

sector. In the private sector, an owner 


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bears the risk of changes when an asset 

increases or decreases in value. The 

owner may realize a return on its 

investment for capital improvements 

when it sells an improved property, if 

the value has appreciated, or lose 

money if the value has declined. In 

contrast, under concession contracts 

with the NPS, the concessioner invests 

in facilities they do not own. As a result, 

since the concessioner cannot receive a 

return on the investment through a sale 

of the property, LSI provides them that 

opportunity in the form of a guaranteed 

return to the concessioner of its 

investment. 

Although the NPS seeks to encourage 

concessioners to make capital 

investments, it must balance the 

benefits of such investments with the 

need to address the LSI generated from 

such investments. If the incumbent 

concessioner wins the new contract, the 

concessioner retains the LSI value, 

which continues through the term of the 

next contract. If there is a new 

concessioner, the LSI is often 

transferred to a new concessioner by the 

new concessioner compensating the 

outgoing concessioner for the value of 

the LSI. This can create a significant 

investment hurdle that limits 

competition on the contract. A higher 

initial investment can lead to reduced 

competition because fewer entities have 

access to the large buy-in amounts for 

certain contracts or because the return 

on their investment is not as attractive 

as other opportunities. When there is 

the likelihood of less competition, the 

incumbent also may not be incentivized 

to offer as many new enhancements 

when providing the services required, 

which can lessen the visitor experience. 

If, instead, the NPS pays the value of the 

LSI to the outgoing concessioner, the 

funds expended are unavailable to 

support other NPS needs, such as 

prospectus development or managing 

the new concessioner during the term of 

the contract and improving visitor 

operations and facilities. 

Change 6: Definition of Major 

Rehabilitation 

Section 51.51 defines terms used in 

subpart G to explain how LSI is applied. 

The NPS revises the definition of 

‘‘major rehabilitation’’ in order to 

simplify and more appropriately 

characterize what qualifies as a major 

rehabilitation with the intent of 

encouraging investment in commercial 

visitor service capital improvements by 

concessioners. These changes apply for 

future concession contracts. 

First, the NPS simplifies the 

definition of a major rehabilitation by 

removing the term ‘‘comprehensive’’ 

because it is vague and suggests a 

limitation on investments that is not 

intended to be included in the concept 

of a planned ‘‘major’’ rehabilitation as 

defined in the regulation. 

Second, the NPS removes the term 

‘‘that the director approves in advance’’ 

as § 51.54 already requires such 

approval for any capital improvement, 

including major rehabilitations. 

Third, the NPS removes the 

requirement that, unless special 

circumstances exist, the Director must 

determine the rehabilitation project is 

completed within 18 months from the 

start of the rehabilitation work. Projects 

must be approved by the Director and 

any approval would include a project 

schedule. Eighteen months is a 

timeframe typical for such projects. In 

practice, however, the Director approves 

the timeline for major rehabilitation 

projects based on the complexity and 

scope of the project. The result is that 

the 18-month requirement in the 

existing regulation has been rendered 

superfluous and does not provide any 

benefit to the public. Removing this 

requirement simplifies and clarifies the 

definition to match existing practice. 

Fourth, the NPS decreases the 

construction cost threshold for what 

constitutes major rehabilitation from 

50% of the pre-rehabilitation value to 

30% of the pre-rehabilitation value. 

This allows for a broader range of major 

commercial visitor service capital 

improvement construction projects to 

qualify for increased LSI under § 51.64 

or new LSI under § 51.66. 

The NPS selected the 30% threshold 

through industry research. The 

International Facility Management 

Association identifies 30% as the 

threshold for when a rehabilitation is 

‘‘critical’’ to the structure. The NPS 

believes the 30% threshold better aligns 

with this industry standard than does 

the 50% threshold in the existing 

definition. Further, the NPS believes 

that broadening the situations in which 

the Director may approve the 

availability of LSI will facilitate 

important and needed capital 

improvement projects that will improve 

the conditions of facilities and help 

ensure a safe and enjoyable experience 

for park visitors. 

While the 1998 Act intended to 

promote private investment in 

concession structures by providing LSI 

to concessioners, the 50% threshold 

contained in the existing regulations has 

limited the Director’s ability to allow 

concessioners’ opportunities to make 

investments of the type envisioned by 

Congress. Concerns have been raised 

that the current regulations actually 

discourage investment in concessions 

structures. The NPS seeks to improve 

the regulations to encourage 

concessioners to invest in capital 

improvements. 

Broadening the scope of projects that 

can be supported by the availability of 

LSI will have other consequences to the 

concession contract and its 

management. For example, the 

utilization of LSI for rehabilitation 

projects allows for the recovery of 

investment by the concessioner where 

insufficient remaining contract term 

could make the investment financially 

imprudent without LSI lowering the risk 

of that investment. This lower risk 

associated with the ability of a 

concessioner to incur LSI will be 

considered in the NPS analysis of the 

opportunity and may result in a higher 

franchise fee set in the prospectus 

consistent with the statutory 

requirements to set a fee appropriate to 

the probable value of the contract and 

thus possibly result in a higher 

franchise fee paid to the government. 

Franchise fee revenue may also increase 

if increased concessioner investment in 

higher quality facilities results in 

increased visitor demand for NPS 

concessions. The NPS could use the 

new fee revenue for other NPS needs or 

when appropriate to buy down LSI 

incurred on the contract as a result of 

the concessioner investment. This 

assumes that revenue projections for the 

contract are realized and adequate 

franchise fees are available, since 

franchise fees are calculated as a 

function of revenue. The use of 

franchise fees for this purpose will be 

balanced against the use of these funds 

for other NPS needs in light of all 

funding sources. An analysis of the 

expected relationship between LSI and 

franchise fees as a result of this change 

can be found in the report entitled ‘‘36 

CFR [part] 51 Concessions Contract 

Revisions Regulatory Impact Analysis 

(RIA) and Initial Regulatory Flexibility 

Analysis (IRFA)’’ that can be accessed at 

https://www.regulations.gov in Docket 

ID: NPS–2020–0003. 

Fifth, the NPS added to the definition 

of a major rehabilitation, that it must 

improve visitor health, safety, and 

enjoyment or the health and safety of 

concessioner employees and will either 

enhance the property’s overall value, 

prolong its useful life, or adapt it to new 

uses. This adopts a common industry 

definition for the scope of capital 

investment to aid concessioners in 

understanding the scope of LSI-eligible 

projects. 

The changes to the definition of 

‘‘major rehabilitation’’ do not negate the 

requirement that the Director must 

approve in advance any major 


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rehabilitation project in accordance 

with § 51.54. Although the changes to 

the definition will likely increase the 

opportunities for concessioners to seek 

approval for major rehabilitation 

projects, the NPS considers many 

factors when deciding whether to 

approve a capital investment. For 

example, the NPS may decide that the 

value of LSI that would result from the 

capital improvement would decrease 

competition for future contracts, 

outweighing the benefit of the 

improvement. As a result, the 

availability of LSI may not generate the 

desired outcome of increased 

investment in all cases. However, in 

these cases the NPS may pay for the 

capital improvements itself to avoid 

generating imprudent levels of LSI. The 

NPS would need to evaluate the benefits 

of the investment against the 

opportunity costs of diverting funds 

from other projects, and how that would 

impact the quality of other concession 

facilities and visitor services. 

Subpart I—Concession Contract 

Provisions (36 CFR 51.73–51.83) 

The regulations in subpart I govern 

key provisions in concession contracts. 

The NPS makes six changes to this 

subpart, as explained below. 

Change 7: Term of Concession Contracts 

Section 51.73 of the existing 

regulations governs the length of 

concession contracts and contained a 

phrase not required by the statute that 

concessioner contracts should be as 

short as is prudent considering certain 

factors. The final rule deletes the 

reference to ‘‘as short as is prudent’’ to 

better align § 51.73(a) with the 

provisions of the 1998 Act (54 U.S.C. 

101914). The final rule states that 

contracts may not exceed 20 years in 

length and generally will be awarded for 

ten years or less, unless the Director 

determines that the contract terms and 

conditions, including the required 

construction of capital improvements, 

warrant a longer term. The regulations 

also say that it is the policy of the 

Director that the terms should account 

for the financial requirements of the 

concession contract, resource 

protection, and visitor needs, and other 

factors the Director may deem 

appropriate. 

The NPS also revises § 51.73 to allow 

the Director to include contract 

provisions allowing for an optional term 

or terms of one year or more (but not to 

exceed three years in total), provided 

that the total term of the contract, 

including all optional terms, does not 

exceed 20 years. As proposed, the 

concessioner would need to meet the 

performance criteria described in the 

contract. In the final rule, the NPS states 

the subject contract will set out the 

evaluation rating requirements and 

other performance criteria rather than 

regulating the rating standard. The final 

rule also provides that the concessioner 

may exercise the option(s) only if the 

Director has determined the 

concessioner has met the performance 

criteria. This change applies to future 

contracts only. 

The final rule has a separate provision 

allowing the Director and concessioner 

to agree to amend a contract to lengthen 

the original term of a contract when the 

Director determines there has been a 

substantial interruption of or change to 

operations due to natural events or other 

reasons outside the control of the 

concessioner. These substantial 

interruptions could include, for 

example, cessation of operations due to 

extended fire season, severe hurricane 

damage, or lengthy administrative 

closures ordered by the government. 

This change allows the NPS and the 

concessioners a better opportunity to 

receive the benefits that both 

anticipated during the solicitation 

process and upon execution of the 

contract. This change applies to current 

concession contracts still within the 

original term of the contract as well as 

future contracts; it does not apply when 

the concessioner is operating under 

either a temporary concession contract 

or an extension of an existing 

concession contract awarded pursuant 

to subpart D of this part, as the NPS may 

only award a temporary contract or a 

contract extension ‘‘for a term not to 

exceed 3 years,’’ and only ‘‘[t]o avoid 

interruption of services to the public[.]’’ 

54 U.S.C. 101913(11)(A). The NPS 

expects that this change will increase 

competition for contracts and avoid 

situations where concessioners reduce 

services, facility management, or other 

aspects of their contracted requirements 

to cover lost revenue. 

Change 8: New or Additional Services 

The Centennial Act revised 54 U.S.C. 

101913(9) to allow the NPS to amend an 

existing contract to provide new and 

additional services that do not represent 

a material change to the required and 

authorized services under the contract. 

This language may provide new 

opportunities to enhance commercial 

services under existing contracts 

allowing concessioners to meet 

changing visitor needs where 

appropriate. Before the Director 

authorizes such new or additional 

services under a contract, the rule will 

continue to require the Director to 

determine that the services are 

necessary and appropriate for public use 

and enjoyment of the NPS unit where 

they will be provided and are consistent 

to the highest practicable degree with 

the preservation and conservation of the 

resources and values of that unit in 

accordance with the Centennial Act and 

the 1998 Act. 54 U.S.C. 101912(b) and 

10913(9). 

The final rule also regulates the 

administrative practice of allowing 

minor changes to the scope of existing 

services (such as extending operating 

hours) as part of the revisions to this 

section. 

The proposed rule would have 

retained a provision that prohibited the 

Director from including a provision in a 

concession contract that would grant a 

concessioner a preferential right to 

provide new or additional visitor 

services under the terms of a concession 

contract (defined as a right of a 

concessioner to a preference in the 

nature of a right of first refusal). The 

Centennial Act replaced the statutory 

basis for this regulatory prohibition, so 

the NPS excludes it from the final rule. 

This change applies to current and 

future concession contracts. 

Change 9: Setting Franchise Fees 

Section 51.78 reflects the requirement 

of the 1998 Act that concession 

contracts provide for payment to the 

government of a franchise fee in 

consideration of the probable value to 

the concessioner of the privileges 

granted by the contract. The regulations 

describe how probable value will be 

determined and how the fee may be 

adjusted during the term of the contract. 

The final rule modifies § 51.78 in 

several ways to clarify how the NPS will 

set the franchise fee to encourage 

competition and provide enhanced or 

higher quality service offerings while 

considering the reasonable opportunity 

for net profit in relation to capital 

invested and the obligations of the 

contract. 

First, the NPS modifies language in 

§ 51.78(a) to clarify that the 

consideration in the capital invested to 

determine reasonable opportunity for 

net profit includes those funds required 

to be placed in special accounts 

identified in § 51.81, and the obligations 

of the contract as described in the 

prospectus. 

Second, the NPS provides a new 

subsection (b) providing alternative 

methods for the Director to determine 

the type of franchise fee to include in a 

prospectus. Congress has charged the 

NPS with ensuring that the franchise fee 

reflects ‘‘the probable value to the 

concessioner of the privileges granted 

by the particular contract involved,’’ 54 


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U.S.C. 101917(a). Historically, the NPS 

implemented this statutory directive by 

setting a minimum acceptable franchise 

fee in the prospectus and allowing 

competition to determine whether a 

higher franchise fee better reflects the 

contract’s probable value to the offeror 

in consideration of the capital invested 

and obligations of the contract including 

any enhancements in visitor services 

that might be offered. In the final rule, 

the NPS has included an additional 

means of meeting the statutory directive 

by using a ‘‘prospectus franchise fee,’’ 

which will be set at a level to encourage 

competition for the concession 

opportunity through offers of either 

higher franchise fees, or lower franchise 

fees combined with enhanced or higher 

quality service offerings that exceed the 

requirements included in the 

prospectus. The NPS will use the 

prospectus franchise fee unless such use 

is inappropriate, in which case the NPS 

will use the minimum acceptable 

franchise fee. 

Third, the final rule adds in a new 

paragraph (c) that requires that the 

Director use relevant industry data 

when determining the applicable 

franchise fee and to provide the basis for 

this determination in the prospectus. 

These additions to the regulation are 

consistent with historical NPS practice 

in prospectus development that already 

provides the basis for the calculation of 

a franchise fee based on the probable 

value of the contract to the offeror. This 

addition to the regulation will further 

transparency in prospectuses. 

These changes apply to all 

prospectuses issued after the effective 

date of the final rule. As noted, 

however, many of these requirements 

reflect historical NPS practice. 

Change 10: Special Accounts 

Section 51.81(b) of the existing 

regulations allows concession contracts 

to require the concessioner to set aside 

a percentage of its gross receipts in a 

repair and maintenance reserve to be 

used, at the direction of the Director, 

solely for maintenance and repair of real 

property improvements located in park 

areas and utilized by the concessioner 

in its operations. Repair and 

maintenance reserve funds may not be 

expended to construct improvements 

that would be eligible for LSI. The 

proposed rule merely changed the name 

of the ‘‘repair and maintenance reserve’’ 

to ‘‘component renewal reserve to 

reduce confusion about how the funds 

in this reserve may be used.’’ The final 

rule retains that change (which applies 

to current, if amended, and future 

contracts) and well as the following 

changes that will improve the 

understanding of the reserve. 

First, the rule specifies that the NPS 

should identify the anticipated timing 

and estimated costs of component 

renewal projects in the prospectus. This 

change applies to all prospectuses 

issued after the effective date of the final 

rule. 

Second, to further avoid confusion, 

the rule describes that the component 

renewal reserve provides a mechanism 

for a concessioner to reserve monies to 

fund component renewal projects, and 

that concessioner obligations to 

maintain assigned concession facilities, 

including component renewal, are not 

limited to the monies in the component 

renewal reserve. This change does not 

change how the NPS and concessioners 

treat the component renewal reserve or 

the concessioners’ maintenance 

obligations. 

Change 11: Concessioner Rates 

Section 51.82(a) of the existing 

regulations states that concession 

contracts must allow concessioners to 

set reasonable rates and charges to the 

public for visitor services, subject to 

approval by the Director. Paragraph (b) 

explains how the Director will 

determine whether rates and charges are 

reasonable, by comparison with rates 

and charges for facilities and services of 

comparable character under similar 

conditions with due consideration to 

the following factors: length of season, 

peakloads, average percentage of 

occupancy, accessibility, availability 

and costs of labor and materials, and 

types of patronage. Rates and charges 

may not exceed market rates and 

charges for comparable facilities, goods, 

and services, after considering certain 

factors. These requirements are taken 

directly from the 1998 Act. 54 U.S.C. 

101916. 

The 1998 Act also states that the rate 

approval process shall be as prompt and 

as unburdensome to the concessioner as 

possible and rely on market forces to 

establish the reasonableness of rates and 

charges to the maximum extent 

practicable. 54 U.S.C. 101916(b)(1). The 

NPS finalizes several changes to § 51.82 

to meet these requirements. These 

changes apply to current and future 

concession contracts. 

First, the NPS codifies the 

requirements in the 1998 Act and 

provides that the NPS will rely on 

market forces to establish the 

reasonableness of such rates and charges 

to the maximum extent practicable. 

Second, the NPS adds a new 

paragraph (c) that requires the Director 

to identify the rate approval method for 

each category of facilities, goods, and 

services in the prospectus. Unless the 

Director determines that market forces 

are not sufficient to establish the 

reasonableness of rates and charges, the 

rule requires the Director to make a 

competitive market declaration (rather 

than using other NPS annual rate 

approval methods), and further provides 

that rates and charges will be approved 

based upon what the concessioner 

determines the market will bear. The 

Director will determine this by 

reviewing the services being provided 

by the current concessioner relative to 

the comparable set of offerings in the 

market. Other rate approval methods 

will be used only when the Director 

determines that market forces are 

inadequate to establish the 

reasonableness of rates and charges for 

the facilities, goods, or services. For 

example, this may occur for lodging or 

food and beverage outlets where there 

are no alternatives, guiding services for 

one-of-a-kind recreational experiences, 

and transportation to NPS units where 

there is only one way to access the site 

(e.g. ferry service to the Statue of 

Liberty). This rule requires the Director 

to monitor rates and charges and 

competition and allows the Director to 

change the rate approval method during 

the term of the contract to reflect 

changes in market conditions. This last 

provision allows the NPS to respond to 

market pressures on rates for 

concessioner services that did not 

historically exist. This has occurred 

where lodging and other visitor services 

have expanded in gateway 

communities, aided by online searches 

and booking methods that provide more 

options for visitors. In addition, 

competitors in some locations use 

dynamic pricing to set rates, which 

means that prices are adjusted to reflect 

demand. The task of approving 

reasonable and appropriate rates and 

charges in these scenarios is 

burdensome. Unlike private sector 

companies, concessioners must undergo 

an annual rate approval process each 

year where maximum rates are set 

through a complex comparability 

process that occurs months in advance 

of the season. The concessioners are 

then not as able to quickly and 

efficiently adjust rates, particularly in 

times when visitor demand is higher 

than was forecasted. This rule 

acknowledges this fact and allows the 

NPS to more fully consider competitive, 

demand-driven pricing methods where 

it makes sense to lessen this burden. 

The NPS monitors the rates of the 

concessioner. In the event that the 

concessioner’s rates set based upon a 

competitive market declaration no 


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longer reflect changes in market 

conditions taking into account the 

varied characteristics and quality of 

services offered, the Director may 

determine that this rate approval 

method is not providing reasonable and 

appropriate rates and may change the 

rate approval method to one that will 

meet these conditions. The Director will 

monitor rates and charges and 

competition and may change the rate 

approval method during the term of the 

contract to reflect changes in market 

conditions. 

The enhanced use of competitive 

market methods may result in increased 

rates and revenue with no change in 

expenses to the concessioner. These 

changes in the financial opportunity of 

the contract will be accounted for 

through contract requirements that 

would benefit the public using the 

concession services. An analysis of the 

expected relationship between rates and 

such contract changes can be found by 

reading the report entitled ‘‘36 CFR 

[part] 51 Concessions Contract 

Revisions Regulatory Impact Analysis 

(RIA) and Initial Regulatory Flexibility 

Analysis (IRFA)’’ that can be accessed at 

https://www.regulations.gov in Docket 

ID: NPS–2020–0003. The NPS notes that 

the competitive market declaration and 

other rate methods establish reasonable 

and appropriate rates for the services 

that are being offered. This is separate 

than the determination of what services 

are necessary and appropriate, 

including the range of offerings and 

associated price points. That 

determination is conducted through the 

NPS planning process. 

Third, the NPS adds a new paragraph 

(d) that establishes rules for how the 

Director responds to requests from 

existing concessioners to change rates 

and charges to the public so that they 

are as prompt and as unburdensome as 

possible to the concessioner. The new 

language requires each contract to 

include a schedule for rate requests and 

describe the information necessary to 

include in a complete rate request. This 

clarifies a current NPS practice to 

include this information in the 

concession contract operating plan. The 

rule further requires, upon receipt of a 

request for a change in rates or charges, 

the NPS, as soon as practicable but not 

more than 20 days of receipt of the 

request, to provide the concessioner 

with a written determination that the 

request is complete, or, if not, a 

description of the information required 

for the request to be determined 

complete. Where changes in rates and 

charges have been requested and the 

NPS deems the request complete, 

concessioners may notify visitors 

making reservations 90 or more days in 

advance of the anticipated rates subject 

to review and adjustment, if necessary, 

at or before the time of the visit 

pursuant to the NPS’s timely decision to 

approve or reject the rate change. The 

NPS will issue a final decision 

approving or rejecting a request by a 

concessioner to change rates and 

charges to the public within 10 days of 

receipt of a complete request in 

accordance with the conditions 

described in the contract, except for 

those change requests requiring a full 

comparability study, for which the NPS 

will issue a decision as soon as possible 

and in no event longer than 30 days 

after receipt of the complete request. If 

the NPS does not approve of the rates 

and charges proposed by the 

concessioner, the NPS must provide in 

writing the substantive basis for any 

disapproval. These timeframes will be 

exceeded only in extraordinary 

circumstances and the concessioner 

must be notified in writing of such 

circumstances. If the NPS fails to meet 

the timeframes described above, and has 

not notified the concessioner in writing 

of the existence of extraordinary 

circumstances justifying delay, a 

concessioner may implement the 

requested change to rates and charges 

until the Director issues a final written 

decision. If the Director denies the 

requested change to rates and charges 

after implementation by the 

concessioner, the Director will not 

require the concessioner to retroactively 

adjust any rates or charges for services 

booked prior to the Director’s denial. 

Under current policy, the NPS 

responds to rate requests within 45 

days, but does not have any specific 

timeframes as outlined in the revisions 

to the rule. The specific response 

requirements included in the final rule 

will improve responsiveness and 

provide more certainty to concessioners 

by ensuring prompt and transparent 

decisions regarding requests for rates 

and charges. Additionally, the advance 

rate practices described in the rule 

provide the concessioner flexibility so 

they are not encumbered in their ability 

to advertise, take reservations and 

charge reasonable and appropriate rates 

during the rate request and approval 

process. The NPS clarifies that charging 

advanced rates outside the rate request 

schedule in the contract and rate request 

and approval procedures in paragraph 

(c) of § 51.82 may be allowed if 

specified in the contract. Such 

allowances may occur when additional 

advanced rate practices are determined 

by the NPS as appropriate and 

consistent with comparable services and 

when they are conducted in accordance 

with NPS rate administration policy. 

Change 12: Subpart J—Assignment or 

Encumbrance of Concession Contracts 

(36 CFR 51.84–51.97). 

The regulations in Subpart J set forth 

rules for executing assignments and 

encumbrances of concession contracts. 

The proposed rule included a 

prohibition on submitting requests to 

approve an assignment of a concession 

contract within twenty-four months 

following the effective date of the 

contract unless the proposed assignment 

was compelled by circumstances 

beyond the control of the assigning 

concessioner. After receiving many 

comments criticizing this prohibition as 

too restrictive, the NPS has decided to 

withdraw the rule change. Instead of 

imposing an additional restriction on 

the assignment of concession contracts, 

the NPS will pursue its policy objectives 

through the current regulatory 

framework. 

Final Rule 

Summary of Changes 

After internal deliberations and in 

response to comments, the NPS made 

the following changes to the proposed 

rule. For a more detailed discussion of 

these changes, refer to the next section 

entitled ‘‘Summary of Public 

Comments’’ and bureau responses, 

organized by topic. 

Title 36 Description of change 

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

• NPS retained the 18-month rule with exceptions for issuing prospectuses earlier. 

• NPS added a requirement for an annual process to invite ideas for new services and requires public disclosure of proposals and evaluations. 

• NPS changed the factors considered when issuing a prospectus for new concession opportunities. 

• NPS added a reference to the authority for noncompetitive award of concession contracts. 

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


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Title 36 Description of change 

• NPS kept the language as proposed with editing improvement. 

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

• NPS added a maximum aggregate score of 40 points. 

• NPS added a requirement that each selection factor used must have a maximum score of at least one point. 

• NPS provided that the maximum score for the principal selection factor for franchise fees remains subordinate to the 

other principal selection factors listed in § 51.17(a). 

• NPS provided that an offerors will receive one point for agreeing to the prospectus franchise fee or the minimum acceptable franchise fee, whichever is applicable. 

• NPS included the prospectus franchise fee option when describing the scoring for the principal selection factor for franchise fees. 

• NPS provided that the scores for secondary selection factors reflect the relationship between principal and secondary 

selection factors. 

§ 51.17 .............. What are the selection factors? 

• NPS added a requirement to include a secondary selection factor for new services when appropriate. 

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

• The NPS is removing the term ‘‘comprehensive’’ from the definition of a major rehabilitation. 

• The NPS is removing the term ‘‘that the director approves in advance’’ from the definition of major rehabilitation in 

paragraph (a). 

• The NPS is removing the word ‘‘solely’’ from the definition of leasehold surrender interest because it is unnecessary. 

This is a non-substantive edit that will not change the meaning of the definition. 

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

• NPS clarified the conditions for including option terms based on performance factors in new concession contracts including a three-year limit for such options. 

• NPS clarified when the Director and concessioner may amend a concession contract to lengthen the term of a contract 

due to a substantial interruption of or change to operations including a three-year limit. 

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

• NPS included the administrative practice of amending operating plans for minor changes to visitor services. 

• NPS included a list of possible changes that could lead to an operating plan or contract amendment. 

• NPS deleted the provision regarding granting concessioners a preferential right to new or additional services. 

• NPS added a provision that the Director should consider whether other operators adequately provide a service when 

considering whether to amend an existing contract to add a new service. 

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

• The NPS is modifying the language in paragraph (a) clarifying that the consideration in the capital invested to determine reasonable opportunity for net profit includes those funds required to be placed in special accounts identified in 

§ 51.81. 

• The NPS is moving requirements regarding the consideration of revenue to the Government compared to other factors 

to paragraph (c). 

• The NPS is adding a new paragraph (b) providing a new means for the Director to determine the franchise fee for the 

contract as an alternative to the minimum franchise fee. This alternative method would include in the prospectus, a 

‘‘prospectus franchise fee’’ set at a level to encourage competition for the concession opportunity through offers of 

higher franchise fees or lower franchise fees combined with enhanced or higher quality service offerings that exceed 

prospectus requirements. 

• The NPS provides that the NPS will use the prospectus franchise fee unless such use is inappropriate, in which case 

the NPS will use the minimum acceptable franchise fee. 

§ 51.81 .............. May the Director include ‘‘special account’’ provisions in concession contracts? 

• The NPS is revising paragraph (b) to add a requirement that the anticipated timing and estimated costs of component 

renewal projects should be identified in the prospectus. 

• The NPS is expanding paragraph (b) to clarify that the component renewal reserve provides a mechanism for a concessioner to reserve monies to fund component renewal projects and that concessioner obligations to maintain assigned concession facilities including component renewal are not limited to the monies in the component renewal reserve. 

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

• The NPS is removing the requirement provided in the proposed rule that the Director respond to rate requests within 

30 days. 

• The NPS is adding a new paragraph (d) that establishes more defined rules for how the Director responds to requests 

from concessioners to change rates and charges to the public. The provision requires that each contract include a 

schedule for rate requests and describe the information necessary to include in a complete rate request. Specific 

timelines for various rate approval actions by the Director and advanced rate charging allowances during the rate approval process have been included. 

§ 51.87 .............. Does the concessioner have an unconditional right to receive the Director’s approval of an assignment or encumbrance? 

• The NPS removed the requirement in paragraph (i) that the request for approval of the assignment must be received 

24 months or more after the effective date of the contract unless the requested assignment is compelled by circumstances beyond the control of the concessioner. 

Summary of Public Comments 

The NPS published a proposed rule in 

the Federal Register on July 20, 2020, 

(85 FR 43775) and accepted comments 

on the proposed rule through the mail, 

by hand delivery, and through the 

Federal eRulemaking Portal at https://

www.regulations.gov. The comment 

period closed on September 18, 2020. 

The NPS received 68 comments on the 

proposed rule from individuals and 

organizations. A summary of the 

pertinent issues raised in the comments 

and NPS responses are provided below. 

In general, the concessioner community 

generally supported the proposed rule. 

Some individual members of the public 

objected to expanding commercial 


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90106 Federal Register / Vol. 88, No. 249 / Friday, December 29, 2023 / Rules and Regulations 

operations in national parks. Nongovernmental organizations generally 

supported the proposed rule as a whole 

while objecting to some changes, citing 

perceived detrimental effects on the 

National Park System, small business, 

and the visitor experience. After 

considering public comments and after 

additional review, the NPS made several 

substantive changes in the final rule that 

are explained in the responses to 

comments below. Additionally, the NPS 

made non-substantive stylistic, 

formatting, and structural changes in the 

final rule. 

General Comments 

1. Comment: Several commenters do 

not support allowing for commercial 

visitor service opportunities in the 

National Park System and expressed 

concerns that this will have a 

detrimental effect to both resources and 

the public, could change the nature of 

the visitor experience, and is contrary to 

the Organic Act. 

NPS Response: The NPS disagrees 

with these commenters. In accordance 

with statutory requirements contained 

in 1998 Act, the NPS provides 

commercial visitor services only when 

they are necessary and appropriate for 

public use and enjoyment of the unit of 

the National Park System in which they 

are located and are consistent to the 

highest practicable degree with the 

preservation and conservation of the 

resources and values of the unit. These 

statutory conditions are restated in the 

rule in regard to the introduction of any 

new or additional services. NPS adheres 

to these tenets in planning, solicitation 

and award and management of 

concession contracts. 

2. Comment: Several commenters 

assert that the rule could damage or 

disadvantage existing small businesses. 

NPS Response: The NPS disagrees 

that the rule will damage or 

disadvantage small businesses. The 

regulatory impact analysis conducted 

for this rule resulted in a determination 

that the rule will have a positive impact 

on small businesses. First, the rule 

changes are designed to improve the 

way that NPS solicits, evaluates, and 

administers concessions contracts. The 

vast majority of concessioners operating 

in parks (estimated 96%) are small 

businesses as defined by the Small 

Business Administration (SBA) and, as 

such, will benefit from the changes to 

the rule. Solicitations for concession 

contracts are full and open and any 

qualified businesses, including small 

businesses, may compete in such 

solicitations. In regard to whether new 

or additional services may impact small 

businesses outside the park unit, the 

NPS must consider the potential 

impacts on communities located near 

the park area when evaluating the 

potential to offer new and/or additional 

services. This includes potential 

impacts on small businesses. 

Additionally, when considering 

whether to amend the applicable terms 

of an existing concession contract to 

provide new or additional services, the 

rule requires the Director to consider the 

potential benefit to the visitor 

experience where other commercial 

operators (most of which are small 

businesses) in the same park area 

already adequately provide those 

services. 

3. Comment: One commenter 

requested that the NPS include in the 

rule a statement ‘‘that concessions 

agreements are a legitimate strategy for 

meeting the financial needs for both 

park protection and infrastructure 

creation, operation and maintenance 

directly associated with visitor needs.’’ 

NPS Response: NPS declines to make 

this addition as the purpose of 

concession contracts are clearly stated 

in the 1998 Act and are reaffirmed in 

the regulation as currently written. 

4. Comment: One commenter 

expressed concern that the NPS failed to 

include regulations pertaining to the 

Visitor Experience Improvements 

Authority (VEIA) in the rule. 

NPS Response: The NPS declines to 

address the VEIA in this rule as these 

revisions to 36 CFR part 51 focus on 

concession contracts and not on other 

contract types for commercial visitor 

service that may be authorized under 

the VIEA. 

New Concession Opportunities 

5. Comment: The NPS received some 

comments generally opposed to 

increasing commercial operations in 

parks and listed types of activities the 

NPS should prohibit in the regulation 

such as Amazon deliveries, food trucks, 

cell towers, Wi-Fi services, and other 

‘‘urban amenities.’’ The NPS also 

received comments that the NPS should 

consider only the expansion of existing 

services rather than allowing entirely 

new services. 

NPS Response: NPS declines to 

include such a list because some of 

those activities may be necessary and 

appropriate in some parks and during 

some time periods. For example, food 

trucks for special events at the National 

Mall in Washington, DC, would provide 

additional visitor services during well 

attended events. Rather than listing 

specific activities to allow or disallow, 

the NPS relies on existing planning 

processes and the necessary and 

appropriate determination process to 

make park-by-park determinations of 

visitor services to include in a 

concession contract. In some instances, 

services available to the NPS and its 

employees are not subject to concession 

contracts (Amazon deliveries and Wi-Fi 

services). The NPS manages cell towers 

in the National Park System through 

other authorities and not concession 

contracts. The decision of what 

commercial visitor services to allow in 

individual parks considers park specific 

conditions. The NPS regional directors, 

upon advice from park superintendents, 

decide what commercial visitor services 

are necessary and appropriate. NPS 

avoided regulating any specific 

commercial visitor service to allow this 

discretion by those most familiar with 

park-specific conditions. 

6. Comment: Many commenters 

generally supported the idea of 

expanding visitor services citing topics 

such as economic development, 

modernization, and technology. Others 

suggested developing comprehensive 

criteria to evaluate new visitor service 

suggestions. The NPS also received a 

comment that the NPS should 

reevaluate currently provided 

commercial services that may be 

inadequate and should consider the 

public benefits of having multiple 

providers of a service, or multiple 

variations of a service, to suit differing 

visitor needs. 

NPS Response: The NPS appreciates 

these comments. The 1998 Act provides 

that the NPS may issue concession 

contracts only for commercial visitor 

services determined to be necessary and 

appropriate and consistent to the 

highest practicable degree with the 

preservation and conservation of the 

National Park System unit. The NPS 

complies with this direction through 

public planning processes guided by 

NPS Management Policies and related 

guidance. The NPS chooses to allow 

park managers and regional directors 

discretion to consider circumstances 

and conditions unique to a System unit 

rather than define one regulatory 

standard for the entire National Park 

System. Experience has shown that the 

existing policies and guidance provide 

sufficient standards to ensure continued 

preservation and conservation of System 

units as required by law. 

7. Comment: One commenter 

encouraged the NPS to establish an 

annual process for the Director to solicit 

ideas for new services (in addition to 

the recognition in the proposed rule that 

the NPS would do this during park-level 

planning processes). That commenter 

also stated the NPS should commit to 

consider a minimum number of 

proposals each year (suggesting 10). 


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NPS Response: Considering these 

comments, NPS has included in the rule 

a provision to require the Director to 

annually solicit visitor service ideas 

through a process separate from the park 

planning processes. Proposals received 

for new visitor service and concession 

opportunities will be encouraged, 

reviewed, and responded to; however, 

NPS chose not to set a minimum 

number of proposals to consider as the 

NPS cannot predict or control how 

many such proposals it will receive. 

8. Comment: As proposed, the 

regulation stated no party will have a 

preference to a new contract that 

authorizes a suggestion submitted by 

that party. One commenter suggested 

deleting that language and creating a 

method to provide that party 

‘‘appropriate credit’’ in the rating 

process. That commenter also suggested 

the NPS allow the suggesting party, if 

awarded the contract, to credit against 

franchise fees a ‘‘portion of the costs 

incurred . . . in generating a proposal 

for new or additional visitor services 

. . .’’ The commenter suggested 

regulatory language to incorporate these 

concepts. 

NPS Response: The NPS declines to 

make such revisions. The 1998 Act 

included preferences for only two 

categories of concessioners—those 

whose operations generate under 

$500,000/year and those who met 

specific qualifications as outfitters and 

guides. The NPS thinks providing credit 

as suggested by this commenter would 

create a preference system not 

authorized by law. In addition, allowing 

a deduction for the costs of developing 

a suggestion to the Director could also 

provide a preference for the offeror that 

submitted the idea, as knowing it would 

recoup some of the cost of development 

might allow it to propose a higher 

franchise fee than other offerors, and, 

therefore, receive more points for the 

principal selection factor for franchise 

fees during the competitive evaluation 

process. Furthermore, allowing for the 

recoupment of development costs is 

uncommon in the private sector and 

other government contracting actions. 

The NPS sees no benefit in allowing 

such for concession contracts. 

In consideration of these concerns, 

however, the NPS added a new 

provision to § 51.17(b) providing that 

the NPS will include a secondary 

selection factor requesting suggestions 

for new services when appropriate. This 

reflects a practice the NPS has used off 

and on for several years to encourage 

new ideas for commercial visitor 

services within the scope of the contract 

included in a prospectus and should 

allow entities that seek to provide new 

services in a park area to develop such 

ideas and receive appropriate credit as 

part of the competitive process. 

9. Comment: NPS received several 

comments expressing concerns that 

allowing new services may adversely 

affect businesses in nearby towns or the 

operations of other park concessioners 

or commercial operators. 

NPS Response: The final rule 

addresses this concern. In determining 

whether to issue a prospectus for a 

concession contract to provide such 

new concession opportunities, the 

Director shall consider relevant factors 

including whether the suggested 

opportunities are adequately provided 

within the park area by other authorized 

commercial providers; the potential for 

augmented resources for park area 

operations; the effects of the suggested 

concession operations on the park area; 

the sustainability of the suggested 

concession opportunities; the 

innovative quality of the suggestions; 

and the potential impacts on park area 

visitation and on communities located 

near the park area. 

10. Comment: The NPS received 

several comments about using the 

innovative quality of the suggested new 

services as one of the evaluation factors 

because some visitor service ideas, such 

as bicycle rentals, may not be innovative 

but could still provide a valued 

additional visitor service. Another 

commenter suggested NPS consider the 

impacts of new services to park 

operations and the sustainability of the 

new concession operation. 

NPS Response: The NPS chooses to 

keep the innovative nature of the visitor 

service as a factor to consider, however, 

it is by no means a controlling factor or 

intended to work to exclude new visitor 

services that are not considered 

innovative. The NPS also included 

consideration of the impacts of new 

services to park operations and the 

sustainability of the new concession 

operations. 

11. Comment: One commenter stated 

the NPS should set clear criteria in 

determining what visitor services to 

provide within a park, suggesting that 

this would include making the 

necessary and appropriate 

determinations. For many years, the 

NPS has relied on policy to guide this 

exercise of discretion. 

NPS Response: Both NPS 

Management Policies 2006 and the 

Commercial Services Guide have 

information on this process. The NPS 

declines to regulate more specific 

criteria for this decision process. 

12. Comment: One commenter stated 

the NPS should set a deadline for 

developing the process of seeking 

proposals for new visitor services. 

Another commenter recommended the 

NPS include broad agency input and 

include some outside parties in its 

evaluations. Finally, a commenter 

suggested creating a unique plan for 

Alaska. 

NPS Response: While the rule does 

not contain a specific timeframe for 

soliciting and reviewing proposals for 

new visitor services, it does require an 

annual process. The NPS, therefore, 

intends to implement the first 

solicitation of ideas as soon as 

practicable and before the end of the 

calendar year following the effective 

date of the final regulations. The NPS 

will consider suggestions for broad 

input in evaluating proposals for 

developing new visitor service 

opportunities, including those in 

currently underdeveloped Alaska park 

areas as the NPS constructs the new 

visitor service opportunity solicitation 

process and related guidance. 

Timing of Issuing Prospectuses 

13. Comment: Several comments 

generally opposed or generally 

supported the elimination of the 

requirement to issue prospectuses not 

sooner than 18 months before the 

contract expires. Some commenters 

raised specific objections, often 

contradicted by other commenters (for 

example: ‘‘it will increase competition’’ 

and ‘‘it will have no effect on 

competition;’’ ‘‘it will decrease the 

quality of bids’’ and ‘‘it will increase the 

quality of bids’’). 

NPS Response: The NPS has decided 

to keep the language in the existing 

regulation retaining what we call the 18- 

month rule but allowing the Director to 

issue a prospectus earlier when 

necessary to provide additional time to 

potential offerors, such as when 

additional time is needed to avoid 

issuing a prospectus during a busy 

operating season or where potential 

offerors must make significant financial 

commitments to meet the requirements 

of the contract. This additional time will 

be as short as prudent. 

14. Comment: One commenter 

supported keeping the 18-month rule 

and suggested adding a requirement that 

the NPS not issue a prospectus during 

a busy operating season. 

NPS Response: The NPS has chosen 

to keep the 18-month rule. Some limited 

circumstances, however, could result in 

the need to depart from the 18-month 

rule. Generally, the NPS issues contracts 

with a January 1 start date, rather than 

having contract start dates scattered 

over the year, keeping the inventory of 

contracts on a calendar year basis. 

Consequently, the 18-month rule would 


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prohibit the NPS from issuing a 

prospectus sooner than July 1 the year 

before the current contract expires. 

Since most recreation providers are 

busiest during the summer season, the 

18-month rule results in the NPS either 

issuing a prospectus during the 

operator’s busy season or delaying 

release until later that year. Preparing an 

offer during the busiest time of year can 

present many challenges for 

concessioners, especially for small 

businesses with limited staff. Delaying 

the release until later in the year, 

however, can result in the NPS needing 

to extend an existing contract for 

another year because of the time it takes 

the NPS to complete its evaluation 

process, announce the selection of the 

best proposal, and award the contract. 

In some circumstances the potential for 

contract extension out of necessity 

should be avoided by the issuing of a 

prospectus in advance of 18 months 

prior to contract expiration, but as close 

to contract expiration as is prudent. 

15. Comment: Several commenters 

said the NPS should use the ability to 

extend contracts to provide more time 

during the solicitation and evaluation 

period rather than eliminating the 18- 

month rule. 

NPS Response: Contract extensions 

may be appropriate when necessary to 

ensure the continuity of visitor services 

and as such serve as a remedy where the 

circumstances surrounding the 

solicitation and evaluation of proposals 

within the allotted 18-month period 

may give rise to interruptions of services 

to the public. However, such extensions 

should be the exception and not the 

rule. The final rule, therefore, provides 

the NPS with flexibility in certain 

circumstances to use additional time for 

prospectus solicitation, evaluation and 

award, provided that additional time is 

a short as is prudent. This added 

flexibility to the 18-month rule is 

necessary, as the 18-month rule can 

leave insufficient time to solicit, 

evaluate, select and award contracts for 

several reasons. First, as described 

above, to avoid issuing prospectuses 

during the concessioners’ (and likely 

competitors’) busy seasons, the NPS has 

delayed issuing a prospectus until later 

in the year, which frequently leads to 

extending contracts. Second, for more 

complex contracts, the NPS frequently 

allows offerors four to five months to 

compile and submit proposals. Many of 

these contracts require notice to 

Congress at least 60 days prior to award 

(see 54 U.S.C. 101913(6)). All of this 

extra time often leads to the need for a 

contract extension. Third, even for less 

complex contracts, the rigorous 

evaluation and selection processes, 

providing the selected offeror time to 

review the terms of the contract, and 

allowing reasonable transition time also 

may give rise to the need for extensions 

of contracts. 

16. Comment: Several commenters 

pointed to the justification for including 

the 18-month rule in the 2000 

regulations, that issuing prospectuses 

sooner that 18 months before contract 

expiration would result in too much 

uncertainty and speculation. 

NPS Response: The concerns raised 

have led to keeping the 18-month rule 

in the final regulations as a matter of 

general application, but with limited 

exceptions. Over the past 20 years, the 

NPS has developed a professional and 

reliable process to analyze information 

and develop prospectuses. The NPS 

relies on the incumbent concessioner’s 

operating history and on industry 

metrics and the experience of long-time 

financial consultants and A&E firms. 

Where it is necessary due to operating 

circumstances to issue a prospectus 

more than 18 months in advance, the 

reliability of this information will not 

diminish by issuing a prospectus a few 

months earlier. That said, the NPS 

remains concerned with information 

becoming stale when issuing a 

prospectus too far in advance of a 

contract effective date. The NPS also 

anticipates for most contracts where 

circumstances require early release of a 

prospectus, the timing of such releases 

will move less than six months. In other 

rare circumstances, for example, the 

NPS may release a prospectus two years 

before expiration to accommodate a new 

concessioner’s need to acquire 

expensive personal property such as 

passenger ferries. The NPS may award 

those well before operations commence 

to provide the new concessioner an 

awarded concession contract to rely 

upon to enter into acquisition 

agreements and necessary financing. 

17. Comment: Several commenters 

suggested keeping the 18-month rule 

and adding language requiring the NPS 

to demonstrate a need for an earlier 

prospectus release. 

NPS Response: The NPS has added 

criteria for the NPS to use to issue a 

prospectus earlier than 18 months 

before a contract expires. Applying 

these criteria will be the exception to 

the 18-month rule and will be supported 

by an administrative record. Modifying 

the 18-month rule to allow for earlier 

releases when necessary provides the 

NPS with the ability to time the 

issuance of prospectuses to meet many 

goals, including that of relieving 

concessioners of the burden of 

preparing proposals during a busy 

operating season, and of alleviating the 

uncertainty associated with a 

concessioner’s future operations. As 

stated in the preamble to the proposed 

rule, it also allows the NPS to better 

design competition and award for 

contracts with substantial personal 

property investment. The NPS 

recognizes the concern represented by 

commenters opposing this change and 

will develop guidance on factors the 

NPS should consider in determining 

when to release a prospectus as well as 

additional steps the NPS could take to 

improve competition and the quality of 

proposals. 

18. Comment: A commenter suggested 

several processes the NPS should use to 

encourage more and better proposals 

including earlier disclosure of contract 

requirements, two rounds of questions 

and answers, and a more thorough 

debriefing process. 

NPS Response: The NPS will consider 

these as suggestions to consider in 

developing additional policy guidance 

but does not find it necessary to include 

such guidance in the final rule. 

Publishing Notice of a Prospectus 

19. Comment: The NPS received three 

comments related to the publication of 

the notice of a prospectus release. None 

of the comments addressed the change 

in the regulation. One commenter 

suggested changes to the NPS practices 

of posting expected prospectus releases 

on the WASO Commercial Services 

Program website. Two supported 

publishing notice in trade publications 

(included in the existing rule). One 

suggested taking steps to notify the 

incumbent concessioner directly. 

NPS Response: The NPS sees no need 

to make changes to the rule as proposed 

based on these comments, which 

addressed the title of the publication 

and not the method, but will consider 

this input in developing any additional 

policy guidance regarding publication 

methods. 

Weighting Selection Factors 

20. Comment: The NPS received one 

comment opposing the additional 

flexibility the proposed changes would 

provide the NPS due in part to the 

ambiguities in the proposed rule. On the 

other hand, the NPS also received many 

comments supporting additional 

flexibility in scoring proposals but 

asking for further clarification. 

Additional comments noted that each 

selection factor used should be worth at 

least one point. 

NPS Response: The proposed rule 

language, which provided considerable 

flexibility to the NPS to design proposal 

packages that reflected park area goals, 

unfortunately was vague and led to 


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differing interpretations of how the 

scoring would work. The final rule 

clarifies the scoring and recognizes the 

subordination of franchise fees and 

other consideration to the government 

to other principal selection factors. For 

consistency and clarity, the new 

language for § 51.16(a) includes a 

maximum aggregate total point score of 

40, which is 10 points higher than 

provided for in the existing regulations. 

The NPS believes the new maximum 

will provide additional flexibility for 

the NPS and reliability for those who 

submit proposals for new concession 

contracts. The final rule also includes a 

requirement that each selection factor 

used must have a maximum score of at 

least one point. In § 51.16(a)(2) and (3), 

the final rule clarifies the scoring for 

secondary selection factors to reflect the 

relative scoring structure of the existing 

regulations, to wit: the maximum score 

for the secondary selection factor in 

§ 51.17(b)(1) must be lower than the 

maximum score for the principal 

selection factor for franchise fees and 

the maximum aggregate score for all 

other secondary selection factors must 

be lower than the maximum score for 

the principal selection factor for 

franchise fees. This retains the current 

scoring structure and continues to 

differentiate between principal and 

secondary selection factors. 

21. Comment: Many commenters 

pointed out the proposed rule did not 

provide that franchise fees and other 

consideration to the government would 

be subordinate to other principal 

selection factors as required by the 1998 

Act and as incorporated into the 

existing regulations. In a related vein, 

several commenters requested that 

experience receive higher consideration 

than consideration of franchise fees and 

other consideration to the government, 

especially for high risk recreation 

activities. 

NPS Response: In § 51.16(a)(1), the 

NPS added language to reflect the 1998 

Act requirement that consideration of 

franchise fees and other consideration to 

the government will be subordinate to 

the objectives of protecting, conserving, 

and preserving resources of the park 

area and of providing necessary and 

appropriate visitor services to the public 

at reasonable rates, which are two of 

four statutorily mandated ‘‘principal 

selection factors.’’ Even though the 

foregoing statutory requirement 

subordinates consideration of franchise 

fees and other consideration to the 

government only to these two principal 

selection factors, the NPS decided to 

maintain the relative scoring structure 

of the existing regulations and also 

subordinate consideration of franchise 

fees and other consideration to the 

government to the experience and 

related background of offerors and the 

financial capability of offerors, which 

are the other two principal selection 

factors. The NPS also agree that 

experience in high risk operations 

should matter more than consideration 

of franchise fees and other consideration 

to the government, but thinks it should 

matter in all circumstances. And while 

the NPS did not receive comments 

asking to maintain the higher 

consideration for the principal selection 

factor regarding the financial capability 

of offerors over the principal selection 

factor for franchise fees and other 

consideration to the government, we 

recognize from twenty years of 

evaluating proposals that those 

supported by strong financial capability 

and understanding of the business 

opportunity translate into financially 

sustainable concession operations. As a 

result, the final rule provides that the 

maximum score for the principal 

selection factor regarding franchise fees 

and other consideration to the 

government must be less than the 

maximum score for the other principal 

selection factors set out in § 51.7(a). 

22. Comment: The NPS received 

comments that supported continuing to 

award one point for agreeing to the 

minimum franchise fee. 

NPS Response: The NPS revised the 

proposed language to provide that the 

score for agreeing to the prospectus 

franchise fee or the minimum franchise 

fee (as applicable) set out in the 

prospectus would be one point. 

23. Comment: Several commenters 

pointed out that the scoring scheme in 

the proposed rule could result in a 

scoring anomaly where the franchise fee 

is undervalued inappropriately. 

NPS Response: The NPS thinks that 

the maximum aggregate score of 40 

points resolves this concern. 

24. Comment: One commenter 

suggested the NPS limit the score for 

franchise fees to 15% of the total score 

for all selection factors asserting that 

would retain the current approximate 

weight of that selection factor as against 

the other selection factor scores. 

NPS Response: The NPS declined to 

do this for two reasons. First, this could 

lead to a situation where the minimum 

and maximum scores for the principal 

selection factor for franchise fees would 

be other than a whole number, which 

would unduly complicate the panel 

evaluation process. For example, rather 

than having a range of scores from zero 

to four, the range could be zero to 3.705 

or 5.47. Second, by adding the 

maximum score of 40 points, our 

calculations for various scenarios 

resulted in scores for principal selection 

factor 5 at or near levels under the 

existing regulations or around 15%. To 

reflect the change under § 51.78 

defining a new method of developing a 

‘‘prospectus franchise fee,’’ the NPS 

included a reference to that type of 

franchise fee in discussing the scoring 

for the principal selection factor on 

franchise fees. 

25. Comment: The NPS received 

comments stating we should require 

disclosure of subfactor scores for every 

subfactor. 

NPS Response: The NPS declines to 

make this part of the regulatory change 

because each prospectus includes 

proposal instructions that vary little 

from one prospectus to the next. Those 

instructions contain a provision (which 

has been included in the prospectus 

instructions for many years) that all 

subfactors will receive the same weight 

unless the NPS specifies otherwise. The 

NPS believes this instruction sufficient 

for offerors to understand when we do 

and do not assign different scoring 

weights among subfactors. To enhance 

transparency, however, the NPS will 

develop guidance to disclose when 

subfactors are considered of equal 

weight beyond the language in the 

prospectus instructions. 

26. Comment: The NPS received a 

variety of comments suggesting we 

require specific topics for secondary 

selection factors such as using local 

businesses to support concession 

operations, efforts to attract lower 

income visitors, demonstrated 

knowledge or the NPS or the park area 

involved, and recommending additional 

visitor services. 

NPS Response: The NPS agrees these 

are good topics for secondary selection 

factors and have used variations of these 

in past prospectuses. Rather than 

requiring specific topics, however, the 

NPS thinks it important to develop 

topics for secondary selection factors as 

appropriate for the specific concession 

contract. The NPS will consider adding 

to existing policy guidance some of 

these topics to remind those who 

develop prospectuses of the value of 

these ideas. 

27. Comment: The NPS received 

comments asking the NPS to provide 

that certain commitments would receive 

additional points such as favoring 

minority or women-owned businesses 

or specific nonprofit organizations. 

NPS Response: The current regulatory 

language in § 51.17(b)(2) provides 

direction in this regard. 

28. Comment: Several commenters 

stated the NPS should include 

requirements in the regulations to 

explain the allocation of points in each 


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prospectus and how we determined the 

minimum franchise fee. 

NPS Response: The NPS thinks the 

existing structure of proposal packages, 

which identify the NPS’s objectives for 

protecting, conserving and preserving 

park resources and of providing 

necessary and appropriate visitor 

services at reasonable rates, currently 

discloses this reasoning. The NPS, 

however, will review existing policy 

guidance and consider whether we need 

to develop additional guidance on these 

topics considering the changes to the 

scoring as reflected in the new 

regulatory language. In addition, in 

Proposed Change # 8, the NPS has 

provided additional information on how 

it determines the minimum franchise 

fee. 

29. Comment: The NPS received a 

variety of comments suggesting 

additional process changes or guidance 

topics not directly related to the 

revision of scoring in the proposed 

rules. Those topics include making sure 

page limitations reflect the relative 

scoring weights among subfactors, 

having less restrictive operating plans to 

provide more opportunity for creative 

proposals, provide more detailed 

debriefing opportunities, exercise better 

contract management to enforce 

commitments made in proposals, and 

recognition of concessioners working 

with certain nonprofit organizations. 

NPS Response: The NPS will consider 

these when reviewing existing guidance. 

Definition of Major Rehabilitation 

30. Comment: Several commenters 

did not support the change in the 

definition of major rehabilitation and 

proposed the existing definition should 

be retained. One of these commenters 

suggested the change in definition 

would lead to more LSI credit for 

maintenance that should have been 

routine, that the concessioner will delay 

and bundle projects in order to achieve 

more LSI at the lower threshold, and 

stated there is no evidence that 

franchise fees will be increased under 

the reduced threshold. A commenter 

suggested that the options presented all 

transfer costs to the NPS. 

NPS Response: NPS disagrees with 

these comments. As outlined in the 

preamble, the NPS accounts for LSIeligible projects through the prospectus 

development process and considers 

these investments in the franchise fee 

analysis for the contract. The NPS has 

and will maintain procedures to 

approve facility improvement projects, 

monitor maintenance and component 

renewal needs, and other activities to 

ensure LSI-eligible projects are 

conducted in a timely manner and avoid 

unplanned LSI-eligible events. 

31. Comment: One commenter 

suggested that it should be explicitly 

stated that concessioners are responsible 

for maintenance and that clear 

standards should be set for maintenance 

and LSI eligibility. 

NPS Response: NPS declines to 

include a statement in the rule regarding 

maintenance responsibilities as those 

responsibilities are clearly defined in 

the standard concession contract. NPS 

already has standards for maintenance 

and LSI eligibility in the standard 

concession contract and policy but will 

review its policy and update as 

necessary. 

32. Comment: One commenter 

recommended that NPS remove the term 

‘‘comprehensive’’ from the definition of 

major rehabilitation in Section 51.51 

because existing criteria in the 

regulation make clear that LSI applies 

only where the investment is substantial 

and adding the undefined term 

‘‘comprehensive’’ appears unnecessary 

and risks confusing the standard. 

NPS Response: NPS agrees that the 

term ‘‘comprehensive’’ is vague and an 

unnecessary modification of the term 

‘‘major rehabilitation’’ and therefore has 

been removed from the rule. A major 

rehabilitation is a planned rehabilitation 

of an existing structure that will either 

enhance the property’s overall value, 

prolong its useful life, or adapt it to new 

uses and therefore could involve a 

number of separate planned actions that 

collectively and in combination are a 

major rehabilitation that benefits the 

subject structure. 

33. Comment: Several commenters 

recommended additional modifications 

to the definition of major rehabilitation 

projects eligible for LSI. Commenters 

proposed that a LSI-eligible major 

rehabilitation should include ‘‘any 

qualified capital investment approved 

by the Director in advance and vital to 

the visitor health, safety and enjoyment 

or the health and safety of NPS and 

concession employees with the life 

expectancy of at least 30 years.’’ 

Commenters also proposed that a LSIeligible major rehabilitation should be 

any ‘‘Capital Improvements as defined 

by Generally Accepted Accounting 

Principles (GAAP) or . . . is a qualified 

capital investment approved by the 

Director. . .’’. The commenter 

separately indicated that the criteria for 

what work on existing capital 

improvements can qualify for LSI must 

incorporate the Congressional intent of 

‘‘capital improvements,’’ whether as 

defined under GAAP or some other 

commonly used industry definition. 

NPS Response: The NPS declines to 

incorporate these recommendations as 

presented, but has included a more 

detailed definition of major 

rehabilitations eligible for LSI to 

provide clarity and more closely track 

industry standards. NPS has described 

why the use of GAAP is not an 

appropriate standard for this purpose in 

the report titled 36 CFR [part] 51 

Concessions Contract Revisions 

Regulatory Impact Analysis (RIA) and 

Initial Regulatory Flexibility Analysis 

(IRFA)’’ that can be accessed at https:// 

www.regulations.gov in Docket ID: NPS– 

2020–0003. Instead, the final rule 

defines an LSI-eligible major 

rehabilitation to be a planned 

rehabilitation of an existing structure 

where the construction cost exceeds 

thirty percent of the pre-rehabilitation 

value of the structure and the work 

performed improves visitor health, 

safety, and enjoyment or the health and 

safety of concessioner employees and 

will either enhance the property’s 

overall value, prolong its useful life, or 

adapt it to new uses. The NPS selected 

the 30% threshold through industry 

research, specifically the International 

Facility Management Association, and 

the requirement that the work ‘‘either 

enhance the property’s overall value, 

prolong its useful life, or adapt it to new 

uses’’ relies on common industry 

understanding of the term ‘‘capital 

improvement.’’ The NPS declines to 

include projects for NPS employee 

safety in the definition of LSI-eligible 

major rehabilitations since projects for 

that purpose are not specifically 

relevant to concession contracts. NPS 

does not include a 30-year life 

expectancy condition for qualifying 

major rehabilitations but does include 

that the work must either enhance the 

property’s overall value, prolong its 

useful life, or adapt it to new uses. 

34. Comment: One commenter 

suggested the proposed changes to the 

LSI eligibility threshold should apply to 

existing contracts and not only new 

contracts. 

NPS Response: NPS declines this 

recommendation. NPS will not apply 

changes to the LSI eligibility to existing 

contracts as changing the LSI structure 

would change the financial terms of the 

concession contract and would be a 

material change to the opportunity that 

was initially solicited. 

35. Comment: One commenter 

suggested that the NPS allow LSI for 

employee housing for concessioners or 

for the housing of both NPS and 

concessioner employees. 

NPS Response: No change is needed 

to the rule. Concessioners may already 

obtain LSI for capital improvements for 


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employee housing where it is 

determined to be necessary during the 

prospectus process. However, a 

concessioner cannot build dedicated 

NPS-employee housing under a 

concession contract as such capital 

improvements are not a commercial 

visitor service. 

36. Comment: One commenter 

proposed that the criteria for defining 

fixtures be modified through policy. 

NPS Response: NPS is not taking any 

action in the rule but may consider this 

recommendation if appropriate in 

policy as suggested. 

37. Comment: One commenter 

encouraged the NPS to use the 

alternative method formula (aka 

straight-line depreciation) allowed for 

contracts where LSI is estimated to 

exceed $10 Million. 

NPS Response: The NPS already uses 

this formula where the NPS determines 

it is appropriate. 

38. Comment: One commenter 

suggested that NPS allow concessioners 

to negotiate third party agreements that 

provide the concessioner with 

reimbursement rights that survive both 

during and after the length of the 

concession contract. For example, a 

ferry concessioner may negotiate with 

the third party for the right to recover 

a docking fee for use of the constructed 

facility over a certain number of years, 

extending beyond the end of the 

concession contract, as well as a 

provision for an incoming concessioner 

to buy out that right. While the NPS 

would not confer these rights to the 

concessioner, NPS would allow these 

agreements, and would have to disclose 

them to a new incoming concessioner. 

The commenter suggested that allowing 

concessioners a better third-party 

reimbursement approach could 

incentivize and encourage even more 

essential and complementary projects— 

dock and dock repairs, seawalls, 

roadways, parking, lighting, shelters— 

that greatly improve visitor services for 

the park. 

NPS Response: NPS is not taking any 

action in the rule but may consider this 

recommendation if appropriate in 

policy as suggested. There is nothing 

currently in the regulation that requires 

NPS approval of these third-party 

arrangements; however, when the NPS 

determines that third-party capital 

investment could potentially be 

required, the NPS takes this investment 

into consideration when determining 

the franchise fee for the contract. 

Term of Concession Contracts 

Most commenters supported the 

proposed changes to § 51.73 that 

primarily set out circumstances when 

the NPS may add additional operating 

time to a concession contract without 

invoking the extension authority of 

§ 51.23 to avoid an interruption of 

visitor services. When reviewing the 

proposed changes to the rule, the NPS 

noticed an error in § 51.73(a) in the 

following sentence: ‘‘The Director will 

issue a contract with a term longer than 

10 years when the Director determines 

that the contract terms and conditions, 

including but not limited to the required 

construction of capital improvements or 

other potential investments related to 

providing both required and authorized 

services, warrant a longer term 

(emphasis added).’’ To clarify, when 

developing the financial analysis for a 

new concession contract, the NPS 

analyzes the financial profile of 

providing the required visitor services 

but not the authorized visitor services as 

a concessioner may choose not to offer 

the authorized visitor services. 

Consequently, the final rule deletes the 

italicized words in the quoted language 

above to accurately reflect the financial 

requirements of the new contract. 

39. Comment: Several commenters 

wanted the NPS to retain the phrase 

‘‘should be as short as prudent’’ in 

§ 51.73(a), stating the phrase reinforced 

Congressional intent to support 

competition for concession contracts. 

NPS Response: The proposed rule 

deleted the phrase ‘‘should be as short 

as is prudent’’ from § 51.73(a). The 

phrase was not reflective of the statutory 

requirements, as the language of the 

1998 Act expresses no preference for the 

shortest possible term. 

40. Comment: One commenter wanted 

the NPS to delete the phrase ‘‘years 

(unless extended in accordance with 

this part)’’ from the end of the first 

sentence of § 51.73(a) asserting it was 

inconsistent with Congress limiting the 

length of concession contracts to 20 

years. 

NPS Response: The NPS declines to 

make that change. The subject phrase 

appears in the existing regulation, 

recognizing that the authority under 

§ 51.23 to extend contracts to avoid an 

interruption of visitor services applies 

to concession contract no matter the 

length of the term. 

41. Comment: The proposed language 

for § 51.73 (b) appeared to create 

confusion among commenters and may 

not have accurately reflected the NPS’s 

intent for the two situations for option 

terms. 

NPS Response: The NPS has revised 

the language to clarify these provisions. 

The first situation provides that the NPS 

may include contract terms that allow a 

concessioner to have additional option 

years for meeting NPS-defined 

performance criteria, which includes 

evaluation ratings criteria (the NPS 

refers to this as the performance option). 

The second situation provides that the 

Director (outside the express terms of a 

concession contract) may provide a 

concessioner additional operating terms 

for substantial interruption in 

operations (the NPS refers to this as the 

interruption option). For the 

performance option, the NPS would 

develop opportunities for new 

concession contracts providing 

additional operating years if the 

concessioner performs at a defined 

evaluation level and meets other 

performance metrics (for example, 

occupancy during shoulder season or 

visitor satisfaction scores). The NPS 

would describe those performance 

metrics in the draft contract included in 

a prospectus to reflect the NPS’s 

priorities for that operation. The NPS 

will develop additional guidance on this 

process. 

42. Comment: Some commenters 

expressed concern with the timing of 

exercising performance options. 

NPS Response: The NPS understands 

the issues with timing and the 

prospectus process. The NPS has used 

this in one current contract, which set 

out the time by which the Director must 

determine the concessioner has met the 

performance criteria and the time in 

which the concessioner must agree to 

exercise the option. That contract also 

had provisions for continued levels of 

performance after exercise of the option 

to support continued successful 

operations. The timing recognizes the 

need for the NPS to commence 

prospectus development for a new 

contract at a certain point should the 

concessioner not achieve the 

performance criteria or decide to not 

exercise the option for additional time. 

For the interruption option, the 

Director would exercise his or her 

discretion to amend an existing 

unexpired contract to provide 

additional operating time when events 

outside the control of the concessioner 

cause a substantial interruption of or 

change to operations. This ability of the 

Director to take such action does not 

need to be an express part of a 

concession contract and is an exercise of 

the Director’s discretion and authority 

under the 1998 Act. 

The NPS added language clarifying 

that both options are subject to the 

statutory requirement that concessions 

contracts, including options, are limited 

to terms of 20 years. One commenter 

wanted that limitation struck from the 

regulation, but the NPS does not find 

the statutory authority to do so. Other 

commenters urged the NPS to limit the 


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length of performance options and one 

suggested a limit of three years like 

contract extensions. The NPS agrees and 

has included language for such 

limitation, thereby adopting for option 

years Congress’ expressed preference of 

a three-year maximum when it comes to 

increasing the length of time a 

concessioner may provide visitor 

services. 

43. Comment: Several commenters 

asked for clarification surrounding the 

issue of ‘‘favorable annual ratings’’ for 

performance options as used in the 

proposed rules. Several commenters 

asked the NPS to define ‘‘favorable.’’ 

NPS Response: The NPS has a 

comprehensive concessioner evaluation 

system that has the following levels of 

ratings: superior, satisfactory, marginal, 

and unsatisfactory. Just a few years ago, 

the superior level did not exist, but was 

added as a matter of guidance. NPS 

believes it important to retain the 

flexibility to adjust how we evaluate 

concession operations and describe 

performance levels as a matter of 

guidance and not of regulation. At this 

time, a favorable rating would be at the 

satisfactory or superior level. 

44. Comment: Several commenters 

objected to the requirement of a 

favorable annual rating for every year of 

the contract citing issues with the NPS’s 

evaluation system and subjectivity of 

park managers. Some commenters 

wanted the NPS to eliminate any 

requirement regarding evaluation 

ratings. 

NPS Response: NPS agrees that a 

favorable rating, which documents that 

a concessioner is meeting the terms of 

the concession contract, should not be 

required for every year of the contract 

but otherwise disagrees with those 

comments. Generally, a favorable rating 

indicates that a concessioner is meeting 

the terms of the concession contract, 

which seems a minimum expectation, 

but an unusual instance of poor 

performance should not be used to 

frustrate the award of additional 

operating time where performance 

otherwise justifies such an award. 

Rather than define the requirement in 

the regulation, however, the NPS 

proposes to define all performance 

requirements in the individual 

contracts, including the operational 

goals the concessioner must meet and 

the evaluation ratings the concessioner 

must achieve. 

45. Comment: NPS received one 

comment suggesting the rule authorize 

amending a contract to provide an 

additional operating term for new or 

unanticipated mid-contract investments. 

NPS Response: NPS declines to 

include this in the final rule as it has not 

evaluated the potential economic 

consequences of such a change. 

46. Comment: NPS received a 

comment suggesting additional actions 

NPS could take to encourage high 

performance from concessioners such as 

reducing franchise fees in later years of 

a contract. 

NPS Response: NPS did not analyze 

the consequences of reducing franchise 

fees in later years of contracts and does 

not understand the economic 

consequences of such action, especially 

as it would affect the NPS’s ability to 

plan for use of franchise fees. Also, NPS 

did not include such item in the 

proposed rule and receive public 

comment on such action. 

47. Comment: A commenter suggested 

the NPS solicit additional ideas from 

concessioners to incentivize their 

performance and earn performance 

options. 

NPS Response: The NPS declines to 

add such process to the regulation but 

may consider it in guidance. The NPS 

intends to use performance options to 

meet its goals. The NPS is not sure if 

meeting the concessioners’ goals would 

meet the NPS’s objectives and needs to 

evaluate such an idea further. The NPS 

also received comments raising 

questions about how we would 

implement performance options when a 

park has multiple operators providing 

the same or similar service under a 

group of contracts. The NPS will 

address these situations on a case by 

case basis as it develops prospectuses 

using such options. 

48. Comment: Several commenters 

stated the NPS should not shorten the 

‘‘base term’’ in order to provide for 

options. 

NPS Response: The NPS interprets 

‘‘base term’’ as meaning ten years and 

thinks the comment means that 

contracts with performance options 

should have an initial term of ten years 

before options. The NPS appreciates this 

perspective, but will not add language 

to the regulation to include such a 

provision. The NPS will consider the 

concern in developing guidance for 

performance options. It is not the intent 

of the rule to have the availability of 

performance options affect the base term 

in any way. The base term must reflect 

the financial requirements of the 

contract. Several commenters stated the 

concessioner should be able to refuse to 

exercise an option. The final rule 

provides that it is the concessioner that 

would exercise the option once the 

Director has determined the 

concessioner has met the performance 

criteria. An allowance to exercise an 

option includes the ability to decline 

the exercise of the option. 

49. Comment: For interruption 

options, one commenter stated the rule 

should specify that the NPS can require 

no other contract changes unless the 

concessioner agrees. 

NPS Response: The NPS chooses not 

to include such a restriction in the 

regulation, believing that it could 

unduly constrain the Director’s 

discretion. 

50. Comment: The NPS received 

comments on other incentives it could 

offer to enhance concessioner 

performance as well as encouragement 

to increase the length of contracts. 

NPS Response: The NPS appreciates 

these comments. As for contract length, 

the NPS again reminds commenters that 

Congress defined the maximum contract 

term as 20 years and that stated 

contracts generally should be ten years 

or less. 

New or Additional Services 

Many comments supported the 

concept of adding new or additional 

services to existing concession 

contracts. The NPS received suggested 

revisions from industry trade groups 

and some individual concessioners. 

51. Comment: For § 51.76(a), one 

commenter suggested revising the 

regulatory language to specifically allow 

for adjustments to existing services that 

could be provided by changes to the 

operating plan (which is an exhibit to 

and part of a concession contract). That 

commenter proposed using a metric 

measured against existing gross receipts 

as a method for determining when new 

or additional services could simply be 

added to a contract’s operating plan by 

a superintendent or must be added to 

the main body of the contract through 

a formal amendment executed by the 

Director. 

NPS Response: The NPS declines to 

make this change as it overly 

complicates current practices not 

subject to a specific rule, such as 

expanding operating hours for a store or 

extending operating seasons for a 

lodging facility. 

52. Comment: A commenter proposed 

to add criteria for consideration 

involving contribution to visitor 

enjoyment and understanding of the 

System unit and the National Park 

System. 

NPS Response: The NPS-proposed 

language in § 51.76(a) is nearly identical 

to the statutory language in the 

Centennial Act, and the NPS declines to 

add to the statutory criteria. 

Additionally, the suggested 

supplemental criteria, enhancing visitor 

experiences and contributing to visitor 

understanding and appreciation of a 


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unit, already are part of the necessary 

and appropriate determination. 

53. Comment: A commenter proposed 

rule language that would require 

keeping the franchise fee at the existing 

level after adding new or additional 

visitor services. 

NPS Response: The NPS declines to 

make that change. Although rare, some 

changes could provide substantial 

revenue gains to the concessioner 

without significant added expense. For 

example, increasing the number of 

passengers a concessioner could 

transport on a vessel creates little 

additional expense but adds 

considerable additional revenue on a 

passenger by passenger basis. The NPS 

sees no reason to prohibit the NPS from 

sharing the financial benefits of such a 

change. 

54. Comment: A commenter proposed 

a sample list of actions that could be 

considered new or additional services. 

NPS Response: The NPS included a 

list of such actions in the rule. 

55. Comment: Several commenters 

requested a provision prohibiting 

adding new and additional services to a 

concession contract if other 

concessioners already provide the 

service in the System unit. 

NPS Response: 36 CFR 51.77 provides 

‘‘Concession contracts will not provide 

in any manner an exclusive right to 

provide all or certain types of visitor 

services in a park area. The Director 

may limit the number of concession 

contracts to be awarded for the conduct 

of visitor services in a particular park 

area in furtherance of the purposes 

described in this [Part 51].’’ The NPS 

thinks that these commenters raised a 

valid concern, and § 51.77 allows 

recognizing such concern. 

Consequently, the NPS has added 

language stating the Director should 

consider whether other commercial 

operators in the park area already 

provide the services adequately. 

Although the NPS received no 

comments on the proposed subsection 

(b), we deleted it because it 

implemented a provision in the 1998 

Act replaced in the Centennial Act. 

Setting Franchise Fees 

56. Comment: Several commenters 

supported the proposed changes to the 

rule clarifying how the NPS sets the 

franchise fee. 

NPS Response: No proposed action or 

response is required. 

57. Comment: One commenter 

indicated that the NPS should expand 

the scope of the data it uses to 

determine the minimum franchise fee 

beyond ‘‘relevant hospitality industry 

data’’ to include outdoor recreation 

industry data. 

NPS Response: The NPS currently 

uses such data and has incorporated 

such revisions to the rule. 

58. Comment: One commenter 

suggested that the NPS should use 

current practices to establish the 

minimum acceptable franchise fee and 

then reduce that minimum franchise fee 

by 25% when posting that minimum 

franchise fee in the prospectus. The 

commenter suggested that it would 

allow offerors to compete as Congress 

intended by letting offerors propose 

what they believe is the best balance of 

efforts to protect park resources and 

provide quality visitor services (which 

are the primary selection criteria) along 

with the most competitive fee. 

NPS Response: After reviewing 

comments and internal deliberation, 

NPS will provide an alternative to its 

current practice of setting a minimum 

franchise fee. This alternative will be to 

set a ‘‘prospectus franchise fee’’ and 

allow offerors to either propose a higher 

franchise fee, or a lower franchise fee 

when combined with enhanced or 

higher quality visitor services offerings 

that exceed prospectus requirements, as 

allowed in the 1998 Act. 

59. Comment: Several comments 

indicated NPS should expand on data 

provided in the prospectus to include 

additional hospitality statistics, 

profitability measures, return on 

investment assumptions or more 

thoroughly describe the steps associated 

with calculating the franchise fee. 

NPS Response: The NPS declines this 

suggestion. NPS indicated in the 

proposed rule that it would provide the 

basis for its franchise fee analysis and 

retains this proposal in the final rule. 

However, NPS will not expand the 

information provided beyond this basis 

because NPS will continue to expect 

offerors to complete their own due 

diligence to present their understanding 

of the business opportunity. 

60. Comment: One commenter 

recommends NPS adopt a policy of 

setting minimum franchise fees below 

‘‘breakeven,’’ to maintain essential 

flexibility and to guard against bids that 

are pre-planned to reduce the 

performance levels. The same 

commenter suggested that the NPS set 

the minimum franchise fee to balance 

requirements, risks, costs and potential 

challenges throughout the contract. 

NPS Response: The NPS declines this 

suggestion. Any franchise fee set by the 

NPS is determined in accordance with 

the 1998 Act, considering the probable 

value to the concessioner of the 

privileges granted by the particular 

contract involved based upon a 

reasonable opportunity for net profit in 

relation to capital invested and the 

obligations of the contract. Artificially 

lowering the fee below this 

determination would be contrary to this 

statuary requirement. However, the NPS 

has included in the rule a new, 

alternative means to set the franchise fee 

in the contract. This alternative 

approach allows the NPS to use a 

‘‘prospectus franchise fee,’’ which is 

still based upon the probable value 

determination mentioned above, but 

also allows offerors to offer a higher 

franchise fee, as they have traditionally 

done, or a lower franchise fee when 

combined with enhanced or higher 

quality visitor service offerings that 

exceed the requirements of the 

prospectus. The NPS also retains the 

current means to establish a minimum 

acceptable franchise fee when the NPS 

determines using a ‘‘prospectus 

franchise fee’’ is inappropriate for the 

particular concession opportunity. 

61. Comment: One commenter 

provided a statement that references 

uniformity in franchise fees in 

situations where there are multiple 

contracts for outfitting, guiding, river 

running or similar services. This NPS 

assumes this is in reference to Sec. 411 

of the 1998 Act (54 U.S.C. 101921). The 

commenter also provided a statement 

that suggests that this would discourage 

bidding up of franchise fees. 

NPS Response: No proposed action or 

response to the commenter’s statements 

is required. NPS abides by the terms of 

the 1998 Act when setting the minimum 

franchise fee for these types of contracts. 

Special Accounts 

62. Comment: All commenters on 

these changes supported replacing the 

term ‘‘Repair and Maintenance Reserve’’ 

with ‘‘Component Renewal Reserve.’’ 

NPS Response: None. 

63. Comment: A few commenters 

suggested that the NPS should 

consistently set out a description of 

CRR-eligible projects in the prospectus 

to help offerors more accurately assess 

and take into account the scope and cost 

of these activities. 

NPS Response: The NPS agrees with 

the commenters, and the final rule 

requires that the timing and estimated 

costs of anticipated component renewal 

projects be identified in the contract. 

64. Comment: Several commenters 

suggested changes to how the NPS 

distributes any CRR that remains at the 

end of the contract, which is currently 

returned to the park as franchise fees. 

One commenter suggested NPS issue 

administrative guidelines that would 

allow concessioners to share in any 

excess funds being left in the CRR fund. 


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The commenter indicated this would 

incentivize concessioners to seek cost 

savings when undertaking CRR-eligible 

projects. The same concessioner 

suggested the NPS include in the rule, 

a process for funding unanticipated CRR 

costs that arise during the term of the 

contract through an addition to the 

special account resulting from either a 

reduction in franchise fee rate or 

generated from other revenues, such as 

surcharges on concessioner-offered 

goods and services. A second 

commenter stated that the funds left in 

the reserve should be returned to the 

park unit as something other than 

franchise fees because the commenter 

believes that returning the funds as 

franchise fees allows the NPS to spend 

the funds for park unit needs that are 

not concession related. 

NPS Response: The NPS disagrees 

with these recommendations. In regard 

to the NPS adjusting the franchise fee or 

otherwise funding the concessioner for 

unanticipated CRR projects, the 

component renewal reserve provides a 

mechanism for a concessioner to reserve 

monies to fund component renewal 

projects. However, concessioner 

obligations to maintain assigned 

concession facilities are not limited to 

the monies in the component renewal 

reserve. Additionally, franchise fee 

changes, including for the purpose of 

adjusting the component renewal 

reserve, cannot occur during the term of 

the contract unless it is in accordance 

with the franchise fee reconsideration 

procedures in the 1998 Act. In regard to 

allowing concessioners to retain a 

portion of the unspent CRR that remains 

at the end of the contract, this could 

create an incentive for the concessioner 

to avoid spending the CRR, not just be 

more efficient in their expenditure. 

Historically, the balance of the reserve 

was returned to the concessioner as has 

been recommended, and the NPS found 

these funds in fact, were often not 

expended when appropriate and 

facilities were inadequately maintained. 

Further, the concessioner has already 

benefited from the CRR as the reserve 

percentage is accounted for in the 

probable value calculation used to set 

the franchise fee. Regarding CRR funds 

that might be returned to the NPS as a 

franchise fee, the NPS has policies that 

prioritize use of franchise fees paid to 

the NPS for concession-related purposes 

such as prospectus development, saving 

for LSI payment and concession 

program management before any other 

park unit needs. Furthermore, to avoid 

the need to convert such component 

renewal reserves, NPS has in place and 

continues to develop processes 

including periodic reserve audits, to 

ensure that reserve funds are used 

during the term of the contract to 

address appropriate component renewal 

projects and avoid deferred 

maintenance for concession facilities. 

65. Comment: One commenter 

suggested that concessioners should be 

able to ‘‘deposit’’ additional reserve 

funds during the contract term to 

address projects that need more funding 

than what is available in the reserve. 

NPS Response: The NPS declines to 

address this in the rule. The NPS will 

consider the proposal for forward 

funding to address such needs as a 

change in policy and/or contract terms. 

66. Comment: One commenter 

recommends that the NPS include, as 

part of the solicitation, a prospectus 

selection factor to gain ‘‘points’’ for 

proposals that include, as a 

commitment, an increase in the reserve 

percentage. 

NPS Response: NPS declines this 

recommendation. Concessioners are 

responsible for all maintenance 

regardless of the amount of funds that 

are available in the CRR. Offerors 

should not be given extra points just to 

meet what is a contractual obligation 

because they reserved such funds. 

Concessioners may set aside additional 

reserves outside the CRR as an internal 

business practice. 

Concessioner Rates 

67. Comment: Several commenters 

expressed concern regarding the change 

to the rule that would emphasize 

competitive market pricing, indicating 

that prices to visitors will rise due to the 

change and visitors will be priced out of 

staying in parks. A different commenter 

suggested that it is the concessioner’s 

goal to set prices as high as possible, not 

considering the diversity of park visitors 

from a variety of income levels. That 

commenter stated visitors should pay 

reasonable rates and concessioners 

should help encourage all visitors to 

enjoy our national parks and the 

services and products concessioners 

provide, implying perhaps that the rule 

changes would prevent this from 

happening. Another commenter 

provided statements that it is not clear 

on how competitive market declaration 

pricing will impact rates (some could be 

higher, others, lower). 

NPS Response: The NPS disagrees 

with these comments. The changes in 

the rule to provide in most cases for 

competitive market declaration 

(‘‘CMD’’) pricing implement rather than 

depart from statutory requirements. The 

final rule clarifies the NPS’s 

commitment to ensuring that rates and 

prices are set in accordance with market 

forces to the maximum extent possible, 

as the1998 Act requires; that is, rates are 

reasonable and appropriate, and the 

process for approving rates is as 

unburdensome to the concessioner as 

possible. CMD represents the best 

means to meet these objectives. As 

noted in the preamble, the NPS 

recognizes there may be situations 

where market forces are not adequate for 

a CMD to provide for reasonable and 

appropriate rates. The NPS will use 

other rate approval methods such as 

direct comparability in those 

circumstances. With regard to meeting 

the needs of a diversity of visitors, the 

NPS strives to offer a variety of service 

levels, thereby providing options to 

account for diverse preferences. For 

example, dependent upon the size of 

park, there may be upscale to rustic (e.g. 

camping) lodging options, and food and 

beverage options from fast casual to 

formal sit-down restaurants offering a 

range of price points as dictated by the 

market. 

68. Comment: One commenter 

suggested the revisions to the rule 

would curtail the ability of the Director 

to approve rates, that they would not be 

effective because some parks are located 

in remote locations where competitive 

markets are scarce and that this market 

emphasis would place significant 

burden on the NPS to prove the 

inadequacy of market forces. 

NPS Response: The NPS disagrees 

with this comment. The burden upon 

the NPS to complete rate approvals has 

not changed; the NPS remains 

responsible for determining whether to 

use CMD or the appropriate alternative 

rate method, to monitor the operations 

to ensure the rate method continues to 

be appropriate, to approve rates when 

CMD is not being used, and monitor 

rates. These features of the rate 

administration process remain 

unchanged. The rule reinforces that 

CMD is the preferred method and 

should be used unless rates using this 

method would not be reasonable and 

appropriate. The NPS has, however, 

defined specific timelines that will 

apply in order to ensure it takes action 

to review and approve rate requests in 

a reasonable timeframe. 

69. Comment: One commenter 

suggested the rule should include a 

statement to address improved 

accessibility as a requirement for new 

contracts or modified pricing. 

NPS Response: The NPS disagrees 

with this comment. Concessioners, as 

expressly set forth in their contracts, are 

already required to provide accessible 

services as operational and facility 

requirements in accordance with 

statutes, regulations, and NPS policy. 


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Additionally, the requirement for 

accessibility is not directly relevant to 

prices and rates. 

70. Comment: One commenter 

suggested the NPS should consult with 

the Interior Business Center (IBC) or an 

alternative external source (i.e., 

hospitality consultants) as part of its 

rate review process. 

NPS Response: The NPS declines to 

add this requirement to the rule. The 

IBC does not have the hospitality 

expertise to complete such reviews. The 

NPS currently uses trained concession 

specialists to complete analyses to 

review rate requests and already uses its 

hospitality consultants as needed to 

provide assistance, particularly during 

the prospectus development process 

and when there are especially complex 

issues. The NPS will continue these 

practices. The NPS also notes that 

involvement by third parties in all 

circumstances would inhibit the ability 

for a timely response to concessioners. 

71. Comment: Numerous commenters 

supported the change in the rule that 

requires the NPS to codify and reduce 

the current policy-defined response 

time for rate requests from 45 to 30 days 

when possible. Many commenters 

suggested that additional steps should 

be taken (either independently or in 

some combination) such as: 

(a) Notifying concessioners within a 

certain window of time if a request is 

not ‘‘complete and timely,’’ no later 

than 10 days after receipt of request; 

(b) Removing the ‘‘when possible’’ 

qualifier that describes the 30-day 

approval window; 

(c) De facto approval of rates in 45 

days without NPS action; 

(d) That NPS notify a concessioner 

within 15 days of receipt of a rate 

request if additional information to 

support the rate request is necessary; 

and 

(e) Defining what constitutes a 

‘‘response’’ from NPS. 

NPS Response: The NPS agrees that 

any rate requests should be responded 

to in a substantive and timely manner. 

To that end, NPS has established in the 

final rule detailed timelines and 

procedures the NPS will follow in 

responding to rate requests. These 

timelines will be met unless there are 

extraordinary circumstances. In the 

event that the timeline is not met and 

there are no extraordinary 

circumstances, the concessioner will be 

able to charge the requested rates until 

the Director makes a rate approval 

determination without being subject to 

retroactive adjustment. 

72. Comment: Numerous commenters 

had varying comments on rate 

structures and CMD. Most commenters 

supported using CMD but had different 

suggestions surrounding its application, 

either to policy or the rule itself. For 

example, one commenter suggested the 

NPS should eliminate clarifying 

examples provided in the preamble to 

the rule on when CMD might not apply 

because there is not a competitive 

market. A commenter wanted the rule to 

state that a comparability study is not 

required to establish CMD reasonable 

rates. Another commenter suggested 

that rate setting for comparability 

should be based on ‘‘unbundled rates’’ 

(likely referring to situations such as a 

tour service where the tour price may 

have associated fees attached such as for 

an audio-tour provided through another 

party) and that such situations should 

be identified in the rule as a ‘‘due 

consideration’’ factor in 51.82 (b). The 

same commenter also suggested changes 

to the rule to create distinctions 

between what it calls ‘‘market rate’’ (the 

highest visitors show they are willing to 

pay), ‘‘direct price’’ (stated as lower 

than market price) and ‘‘final’’ prices 

paid by the consumer. One commenter 

expressed concern that CMD rates could 

result in increased franchise fees to be 

paid to the NPS without accounting for 

the trend in increasing expenses to the 

concessioner and that additional 

requirements could be imposed if NPS 

changes the rate approval method 

during the term of the contract. 

NPS Response: The NPS may consider 

these comments if appropriate, when it 

establishes or adjusts policy for rate 

administration to implement this 

regulation, but the NPS declines to 

address these recommendations in the 

rule. 

73. Comment: A commenter 

recommended that NPS should provide 

national permission to use an 

anticipated rate method where 

competitive market declaration is not 

utilized. 

NPS Response: The NPS declines to 

include this recommendation in the 

rule. The NPS already allows advanced 

rates as a matter of policy where 

appropriate and will continue this 

practice. The NPS has, however, 

included in the rule specific advance 

rate procedures for the time after a 

concessioner has submitted a complete 

rate request but before the NPS has 

made a decision approving or 

disapproving the request to ensure that 

the concessioner can take appropriate 

steps to advertise and take reservations 

during this period. 

Timing of Assigning Contracts 

74. Comment: A number of 

commenters disagreed with the 

proposed restriction on assigning 

concession contracts. Most of these 

commenters focused on the unique 

circumstances of concessioners holding 

qualified contracts and, thus, holding a 

right of preference to a new concession 

contract. Commenters asserted that the 

combination of needing to operate 

satisfactorily for two years under an 

existing contract and a 24-month delay 

in submitting a request to transfer the 

contract to a new operator unfairly 

restricts the transfer of such contracts. 

NPS Response: Although the NPS 

thinks it is reasonable to require 24 

months of operations under a 

concession contract before submitting a 

request to transfer the contract, we have 

decided to withdraw this proposed 

change in consideration of the many 

comments criticizing this prohibition as 

too restrictive. The NPS will develop 

policy and procedures, however, that 

require the authority approving requests 

for assignments of contracts to carefully 

scrutinize the ability of the purported 

new concessioner to provide the 

required services based on that entity’s 

specific experience and financial ability 

to carry out the terms of the concession 

contract. 

Compliance With Other Laws, 

Executive Orders, and Department 

Policy 

Regulatory Planning and Review 

(Executive Orders 12866, 13563, and 

14094) 

Executive Order 12866 provides that 

the Office of Information and Regulatory 

Affairs (OIRA) in the Office of 

Management and Budget will review all 

significant rules. OIRA has determined 

that this rule is significant. 

Executive Order 14094 amends 

Executive Order 12866 and reaffirms the 

principles of Executive Order 12866 and 

Executive Order 13563 and states that 

regulatory analysis should facilitate 

agency efforts to develop regulations 

that serve the public interest, advance 

statutory objectives, and be consistent 

with Executive Order 12866, Executive 

Order 13563, and the Presidential 

Memorandum of January 20, 2021 

(Modernizing Regulatory Review). 

Regulatory analysis, as practicable and 

appropriate, shall recognize distributive 

impacts and equity, to the extent 

permitted by law. 

Executive Order 13563 reaffirms the 

principles of Executive Order 12866 

while calling for improvements in the 

nation’s regulatory system to promote 

predictability, to reduce uncertainty, 

and to use the best, most innovative, 

and least burdensome tools for 

achieving regulatory ends. The 

Executive Order directs agencies to 


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consider regulatory approaches that 

reduce burdens and maintain flexibility 

and freedom of choice for the public 

where these approaches are relevant, 

feasible, and consistent with regulatory 

objectives. Executive Order 13563 

emphasizes further that agencies must 

base regulations on the best available 

science and the rulemaking process 

must allow for public participation and 

an open exchange of ideas. The NPS has 

developed this rule in a manner 

consistent with these requirements. The 

potential costs and benefits of this rule 

were assessed by Industrial Economics, 

Incorporated (IEc), on behalf of the NPS, 

in a Regulatory Impact Analysis 

(prepared for the proposed rule) and 

associated Memorandum (assessing the 

costs and benefits of the changes from 

the proposed rule in the final rule) that 

can be accessed at https://

www.regulations.gov in Docket ID: NPS– 

2020–0003. 

Regulatory Flexibility Act (RFA) and 

Small Business Regulatory Enforcement 

Fairness Act (SBREFA) 

The head of this agency certifies that 

this rule will not have a significant 

economic impact on a substantial 

number of small entities under the 

Regulatory Flexibility Act (5 U.S.C. 601 

et seq.), as amended by the Small 

Business Regulatory Enforcement 

Fairness Act of 1996 (SBREFA; 5 U.S.C. 

801 et seq.). An Initial Regulatory 

Flexibility Analysis (IRFA) was 

prepared pursuant to the Regulatory 

Flexibility Act (RFA) and the Small 

Business Regulatory Enforcement 

Fairness Act (SBREFA). The analysis is 

available in the report prepared by 

Industrial Economics, Incorporated 

(IEc), on behalf of the NPS, entitled ‘‘36 

CFR [part] 51 Concessions Contract 

Revisions Regulatory Impact Analysis 

(RIA) and Initial Regulatory Flexibility 

Analysis (IRFA)’’ that can be accessed at 

https://www.regulations.gov in Docket 

ID: NPS–2020–0003—specifically, 

Chapter 5 of that report. The analysis in 

the IRFA concluded that the potential 

impact on small concessioners is likely 

to be positive. The IRFA estimated that 

the majority (96%) of the entities that 

have concession contracts are small 

businesses and that this makeup is 

likely to be similar in the future. 

Furthermore, the IRFA conducted a 

qualitative analysis to determine the 

likely impacts of the rule on 

concessioners that focused on key 

changes to the rule related to LSI, rates 

and franchise fees. While the NPS lacks 

the ability to quantify the impact, the 

IRFA found that the impacts are likely 

to be beneficial to concessioners in 

general, without any particular bias 

toward small or large businesses. Since 

the majority of contracts are held by 

small businesses, the IRFA concluded 

that the impacts to small businesses 

would therefore be positive. 

The IRFA stated that, due to 

uncertainties associated with 

quantifying the impact on small entities, 

the ‘‘potential exists for the proposed 

rule to result in a significant beneficial 

impact on a substantial number of small 

entities.’’ Based upon a further review of 

the impacts described in the IRFA, the 

NPS now believes the beneficial impact 

on small entities will not be significant 

and will not affect a substantial number 

of small entities. This certification is 

based upon the following statements 

and upon the analysis contained in a 

Memorandum prepared by IEc that 

concludes that the small entities 

holding concession contracts that would 

be affected by this rule represent less 

than 0.1 percent of the small entities 

providing similar services in the United 

States. This Memorandum is available 

on https://www.regulations.gov in 

Docket ID: NPS–2020–0003. 

The IRFA estimated the annual 

transfer payments associated with 

changes in the eligibility threshold for 

LSI in the rule as $4.2 million from 

concessioners to the NPS in increased 

franchise fees and up to $4.2 million 

from NPS to concessioners in the form 

of LSI buy downs for a total net 

financial impact of zero to the 

concessioner community. There are no 

changes between the proposed and final 

rule that the NPS believes would change 

this analysis. 

The IRFA identified that the 

implementation of market-based pricing 

in the rule could result in transfers of 

$54 million in franchise fee revenue 

from concessioners to the NPS. As 

stated in the IRFA, an increase in rates 

resulting from the rule, without any 

change in service or amenities, would 

be reflected as an increase in revenue to 

the concessioner without any increase 

in expense. Because the base franchise 

fee as determined using the current rate 

approval methods (without enhanced 

market-based pricing) already provides 

a reasonable opportunity for the 

concessioner, the NPS assumed in the 

IRFA that all of the additional profit 

would pass-through flow to the 

government in the form of the $54 

million in franchise fees for a total net 

financial impact of zero to the 

concessioner community. There are no 

changes between the proposed and final 

rule that the NPS believes would change 

this analysis. 

One change was made to the final rule 

in response to public comments that 

required further consideration relative 

to potential impacts to the concessioner 

community. That change is in § 51.78, 

Will a concession contract require a 

franchise fee and will the franchise fee 

be subject to adjustment? The final rule 

provides as an alternative, the ability for 

the NPS to provide in the prospectus, a 

proposed franchise fee based on the 

probable value determination in the 

prospectus (‘‘prospectus franchise fee’’). 

The Offerors may bid either (i) higher 

franchise fees or (ii) lower franchise fees 

in combination with enhanced or higher 

quality service offerings that exceed 

prospectus requirements. Any 

investment made by the concessioner to 

provide enhanced or higher quality 

offerings is intended to be offset by an 

adjustment in the franchise fee offered, 

such that the total net financial impact 

to the concession community is 

estimated at zero. 

Congressional Review Act (CRA) 

This rule is not a major rule under 5 

U.S.C. 804(2), the CRA. This rule: 

(a) Does not have an annual effect on 

the economy of $100 million or more. 

(b) Will not cause a major increase in 

costs or prices for consumers, 

individual industries, Federal, State, or 

local government agencies, or 

geographic regions. 

(c) Does not have significant adverse 

effects on competition, employment, 

investment, productivity, innovation, or 

the ability of U.S.-based enterprises to 

compete with foreign-based enterprises. 

Unfunded Mandates Reform Act 

(UMRA) 

This rule does not impose an 

unfunded mandate on State, local, or 

Tribal governments or the private sector 

of more than $100 million per year. The 

rule does not have a significant or 

unique effect on State, local or Tribal 

governments or the private sector. This 

rule clarifies NPS procedures and does 

not impose requirements on other 

agencies or governments. A statement 

containing the information required by 

the UMRA (2 U.S.C. 1531 et seq.) is not 

required. 

Takings (Executive Order 12630) 

This rule does not effect a taking of 

private property or otherwise have 

takings implications under Executive 

Order 12630. A takings implication 

assessment is not required. 

Federalism (Executive Order 13132) 

Under the criteria in section 1 of 

Executive Order 13132, the rule does 

not have sufficient federalism 

implications to warrant the preparation 

of a federalism summary impact 


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Federal Register / Vol. 88, No. 249 / Friday, December 29, 2023 / Rules and Regulations 90117 

statement. A federalism summary 

impact statement is not required. 

Civil Justice Reform (Executive Order 

12988) 

This rule complies with the 

requirements of Executive Order 12988. 

This rule: 

(a) Meets the criteria of section 3(a) 

requiring agencies to review all 

regulations to eliminate errors and 

ambiguity and write them to minimize 

litigation; and 

(b) Meets the criteria of section 3(b)(2) 

requiring agencies to write all 

regulations in clear language and 

contain clear legal standards. 

Consultation With Indian Tribes 

(Executive Order 13175 and 

Department Policy) 

The Department of the Interior strives 

to strengthen its government-togovernment relationship with Indian 

Tribes through a commitment to 

consultation with Indian Tribes and 

recognition of their right to selfgovernance and Tribal sovereignty. The 

NPS has evaluated this rule under the 

Department’s consultation policy and 

under the criteria in Executive Order 

13175, and has determined that it has 

no substantial direct effects on federally 

recognized Indian Tribes and that 

consultation under the Department’s 

Tribal consultation policy is not 

required. 

Paperwork Reduction Act (PRA) (44 

U.S.C. 3501 et seq.) 

This rule contains no new 

information collections. All information 

collections require approval under the 

Paperwork Reduction Act of 1995 (44 

U.S.C. 3501 et seq.). The NPS may not 

conduct or sponsor and you are not 

required to respond to a collection of 

information unless it displays a 

currently valid Office of Management 

and Budget (OMB) control number. 

National Environmental Policy Act 

(NEPA) 

This rule does not constitute a major 

Federal action significantly affecting the 

quality of the human environment. A 

detailed statement under NEPA is not 

required. The NPS has determined the 

rule is categorically excluded under 43 

CFR 46.210(i) because it is 

administrative, financial, legal, and 

technical in nature. In addition, the 

environmental effects of this rule are too 

speculative to lend themselves to 

meaningful analysis. NPS decisions to 

enter into concession contracts will be 

subject to compliance with NEPA at the 

time the contracts are executed. The 

NPS has determined that the rule does 

not involve any of the extraordinary 

circumstances listed in 43 CFR 46.215 

that would require further analysis 

under NEPA. 

Effects on the Energy Supply (Executive 

Order 13211) 

This rule is not a significant energy 

action under the definition in Executive 

Order 13211; although the rule is 

significant under Executive Order 

12866, the rule is not likely to have a 

significant adverse effect on the supply, 

distribution, or use of energy, and the 

Administrator of OIRA has not 

otherwise designated the rule as a 

significant energy action. A Statement of 

Energy Effects in not required. 

List of Subjects in 36 CFR Part 51 

Commercial services, Government 

contracts, National parks, Visitor 

services. 

Signing Authority 

The Assistant Secretary for Fish and 

Wildlife and Parks has delegated 

authority to the Chief of Staff, Office of 

the Assistant Secretary for Fish and 

Wildlife and Parks, to electronically 

sign this document for purposes of 

publication in the Federal Register. 

In consideration of the foregoing, the 

National Park Service is amending 36 

CFR part 51 as follows: 

PART 51—CONCESSION CONTRACTS 

■ 1. The authority citation for part 51 is 

revised to read as follows: 

Authority: 54 U.S.C. 101901–101926 and 

title IV of the National Parks Omnibus 

Management Act of 1998 (Pub. L. 105–391). 

■ 2. Amend § 51.4 by revising the 

section heading and paragraph (b) and 

adding paragraphs (c) through (h) to 

read as follows: 

§ 51.4 How will the Director invite the 

general public to apply for the award of a 

concession contract and how will the 

Director determine when to issue a 

prospectus for a new concession 

opportunity where no prior concession 

services had been provided? 

* * * * * 

(b) Except as provided under § 51.47 

(which calls for a final administrative 

decision on preferred offeror appeals 

prior to the selection of the best 

proposal) the terms, conditions and 

determinations of the prospectus and 

the terms and conditions of the 

proposed concession contract as 

described in the prospectus, including, 

without limitation, its minimum 

franchise fee, are not final until the 

concession contract is awarded. The 

Director will not issue a new prospectus 

for a concession contract earlier than 

eighteen months prior to the expiration 

of a related existing contract except 

when the Director determines it is 

necessary to provide additional time to 

potential offerors, such as when 

additional time is needed to avoid 

issuing a prospectus during a busy 

operating season or where potential 

offerors must make significant financial 

commitments to meet the requirements 

of the contract. This additional time 

should be as short as prudent. 

(c) The Director will issue a 

prospectus for a new concession 

opportunity in a park area when the 

Director determines, in the Director’s 

discretion, that a new concession 

opportunity is necessary and 

appropriate for public use and 

enjoyment of the park area and is 

consistent to the highest practicable 

degree with the preservation and 

conservation of the resources and values 

of the park area. 

(d) The Director will establish 

procedures to solicit and consider 

suggestions for new concession 

opportunities within park areas from the 

public (including from potential 

concessioners) through the National 

Park Service’s planning processes for 

such opportunities as well as through 

annual invitations for proposals for 

improving visitor experiences through 

third-party providers. The Director shall 

fully review all proposals received, 

provide a written evaluation for each 

proposal, and make all proposals and 

completed evaluations available to the 

public. 

(e) In determining whether to issue a 

prospectus for a concession contract to 

provide such new concession 

opportunities, the Director will consider 

relevant factors including whether the 

suggested concession opportunities are 

adequately provided within the park 

area by other authorized commercial 

providers; the potential for augmented 

resources for park area operations; the 

effects of the suggested concession 

operations on the park area; the longterm viability of the suggested 

concession opportunities; the 

innovative quality of the suggestions; 

and the potential impacts on park area 

visitation and on communities located 

near the park area. 

(f) No preference to a concession 

contract shall be granted to a party 

based on that party’s having submitted 

a proposal for a new concession 

opportunity described in this section. 

The Director, however, may award a 

contract noncompetitively to such a 

party when determined appropriate as 

described in § 51.25. 

(g) The Director may consider 

suggestions for new services as 


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90118 Federal Register / Vol. 88, No. 249 / Friday, December 29, 2023 / Rules and Regulations 

additional services to be provided 

through an existing concession contract 

as described in § 51.76. 

(h) Nothing in this section shall 

constrain the discretion of the Director 

to solicit or consider suggestions for 

new concession opportunities or collect 

other information that can be used by 

the Director in connection with a new 

concession opportunity. 

■ 3. Revise § 51.8 to read as follows: 

§ 51.8 Where will the Director publish the 

notice of availability of the prospectus? 

The Director will publish notice of the 

availability of the prospectus at least 

once in the System for Award 

Management (SAM) where Federal 

business opportunities are electronically 

posted, or in a similar publication if this 

site ceases to be used. The Director, if 

determined appropriate, may also 

publish notices electronically on 

websites including social media and in 

local or national newspapers or trade 

magazines. 

■ 4. Amend § 51.16 by revising 

paragraph (a) to read as follows: 

§ 51.16 How will the Director evaluate 

proposals and select the best one? 

(a) The Director will apply the 

selection factors set forth in § 51.17 by 

assessing each timely proposal under 

each of the selection factors on the basis 

of a narrative explanation, discussing 

any subfactors when applicable. For 

each selection factor, the Director will 

assign a score that reflects the 

determined merits of the proposal under 

the applicable selection factor and in 

comparison to the other proposals 

received, if any. The maximum 

aggregate score available for all selection 

factors will be 40 points, and every 

selection factor used must have a 

maximum score of one point or higher. 

Each selection factor will be scored as 

identified in the prospectus, subject to 

the following criteria: 

(1) The maximum score assignable for 

the principal selection factor described 

in § 51.17(a)(5) will be less than the 

lowest maximum score of the other 

principal selection factors described in 

§ 51.17(a) with a score of one point for 

agreeing to the prospectus franchise fee 

(as defined in § 51.78) or, when the 

Director determines appropriate, the 

minimum acceptable franchise fee set 

forth in the prospectus. 

(2) The maximum score assignable for 

the secondary selection factor set forth 

in § 51.17(b)(1) will be less than the 

maximum score for the principal 

selection factor described in 

§ 51.17(a)(5); and, 

(3) The maximum scores assignable 

for any additional secondary selection 

factors set forth in § 51.17(b) will be 

such that the maximum aggregate score 

assignable for all additional secondary 

selection factors will be less than the 

maximum score for the principal 

selection factor described in 

§ 51.17(a)(5). 

* * * * * 

■ 5. Amend § 51.17 by revising 

paragraph (b)(2) to read as follows: 

§ 51.17 What are the selection factors? 

* * * * * 

(b) * * * 

(2) Any other selection factors the 

Director may adopt in furtherance of the 

purposes of this part, including, where 

appropriate and otherwise permitted by 

law, the extent to which a proposal calls 

for the employment of Indians 

(including Native Alaskans) and/or 

involvement of businesses owned by 

Indians, Indian Tribes, Native Alaskans, 

or minority or women-owned 

businesses in operations under the 

proposed concession contract. When 

appropriate, the Director will include a 

secondary selection factor requesting 

suggestions for new services. 

* * * * * 

■ 6. Amend § 51.51 by: 

■ a. Removing the word ‘‘solely’’ from 

the term ‘‘Leasehold surrender interest 

solely’’; and 

■ b. Revising the definition of the term 

‘‘Major rehabilitation’’. 

The revision reads as follows: 

§ 51.51 What special terms must I know to 

understand leasehold surrender interest? 

* * * * * 

Major rehabilitation means a planned 

rehabilitation of an existing structure 

that the Director determines: 

(1) The construction cost of which 

exceeds thirty percent of the prerehabilitation value of the structure; and 

(2) Improves visitor health, safety, and 

enjoyment or the health and safety of 

concessioner employees and will either 

enhance the property’s overall value, 

prolong its useful life, or adapt it to new 

uses. 

* * * * * 

■ 7. Revise § 51.73 to read as follows: 

§ 51.73 What is the term of a concession 

contract? 

(a) A concession contract will 

generally be awarded for a term of 10 

years or less and may not have a term 

of more than 20 years (unless extended 

in accordance with this part). The 

Director will issue a contract with a 

term longer than 10 years when the 

Director determines that the contract 

terms and conditions, including but not 

limited to the required construction of 

capital improvements or other potential 

investments related to providing 

required services, warrant a longer term. 

It is the policy of the Director under 

these requirements that the term of 

concession contracts should take into 

account the financial requirements of 

the concession contract, resource 

protection, visitor needs, and other 

factors the Director may deem 

appropriate. 

(b) The Director may include in a 

concession contract, as advertised in the 

applicable prospectus, an optional term 

or terms in increments of at least one 

year and not to exceed three years in 

total, where the total term of the 

contract, including all optional terms, 

does not exceed 20 years. The Director 

shall specify in the contract the 

performance criteria (including 

evaluation ratings) the concessioner 

must meet to be eligible to exercise such 

option term or terms. Such contract also 

shall provide that the concessioner may 

exercise an optional term or terms only 

if the Director determines that the 

concessioner has met the performance 

criteria defined in the contract. 

(c) When the Director determines, in 

his or her sole discretion, that a 

substantial interruption of or change to 

operations due to natural events or other 

reasons outside the control of the 

concessioner, including but not limited 

to government-ordered interruptions, 

warrants lengthening the original term 

of a concession contract, the Director 

and the concessioner may amend the 

contract to add the amount of time to 

the term of the contract deemed 

appropriate by the Director, which in no 

case may be longer than three years and 

where the total term of the contract, 

including any added time, may not 

exceed 20 years. 

■ 8. Revise § 51.76 to read as follows: 

§ 51.76 May the Director amend a 

concession contract to provide new or 

additional visitor services or grant a 

concessioner a preferential right to provide 

new or additional visitor services? 

(a) The Director may provide for new 

or additional services under the annual 

operating plan of the concessioner or 

through a contract amendment, as 

appropriate, where the Director 

determines the new or additional 

services are necessary and appropriate 

for public use and enjoyment of the park 

area in which they are located. New or 

additional services must be consistent to 

the highest practicable degree with the 

preservation and conservation of the 

resources and values of the park area. 

Such new or additional services shall 

not represent a material change to the 

required and authorized services as set 


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forth in the applicable prospectus or 

contract. Changes may include, but are 

not limited to, extensions of seasons, 

operating hours and increases in 

capacity limitations. 

(b) When considering whether to 

amend the applicable terms of an 

existing concession contract to provide 

new or additional services, the Director 

should consider the benefit to the visitor 

experience where other concessioners or 

holders of commercial use 

authorizations in the same park area 

already provide those services. 

(c) A concessioner that is allocated 

park area entrance, user days or similar 

resource use allocations for the 

purposes of a concession contract will 

not obtain any contractual or other 

rights to continuation of a particular 

allocation level pursuant to the terms of 

a concession contract or otherwise. 

Such allocations will be made, 

withdrawn and/or adjusted by the 

Director from time to time in 

furtherance of the purposes of this part. 

■ 9. Revise § 51.78 to read as follows: 

§ 51.78 Will a concession contract require 

a franchise fee and will the franchise fee be 

subject to adjustment? 

(a) Concession contracts will provide 

for payment to the government of a 

franchise fee or other monetary 

consideration as determined by the 

Director upon consideration of the 

probable value to the concessioner of 

the privileges granted by the contract 

involved. This probable value will be 

based upon a reasonable opportunity for 

net profit in relation to capital invested, 

including any funds required to be 

placed in special accounts identified in 

§ 51.81, and the obligations of the 

contract as described in the prospectus. 

(b) Each prospectus shall include one 

of the following: 

(1) A proposed franchise fee based on 

the probable value determination in the 

prospectus (‘‘prospectus franchise fee’’). 

The prospectus franchise fee should be 

set at a level to encourage competition 

for the concession opportunity through 

offers of either: 

(i) Higher franchise fees; or 

(ii) Lower franchise fees in 

combination with enhanced or higher 

quality service offerings that exceed 

prospectus requirements. 

(2) Alternatively, when the Director 

determines that using a prospectus 

franchise fee is inappropriate for the 

particular concession opportunity, a 

minimum acceptable franchise fee based 

on the probable value determination 

and set at a level to encourage 

competition. 

(c) In determining the minimum 

acceptable franchise fee or prospectus 

franchise fee to include in a prospectus, 

the Director shall use relevant industry 

data for similar operations (e.g., 

hospitality, recreation) and provide in 

the prospectus the basis for the 

determination of the minimum 

acceptable franchise fee or prospectus 

franchise fee. Consideration of revenue 

to the United States shall be subordinate 

to the objectives of protecting and 

preserving park areas and of providing 

necessary and appropriate services for 

public use and enjoyment of the park 

area in which they are located at 

reasonable rates. 

(d) The franchise fee contained in a 

concession contract with a term of 5 

years or less may not be adjusted during 

the term of the contract. Concession 

contracts with a term of more than 5 

years will contain a provision that 

provides for adjustment of the contract’s 

established franchise fee at the request 

of the concessioner or the Director. An 

adjustment will occur if the 

concessioner and the Director mutually 

determine that extraordinary, 

unanticipated changes occurred after 

the effective date of the contract that 

have affected or will significantly affect 

the probable value of the privileges 

granted by the contract. The concession 

contract will provide for arbitration if 

the Director and a concessioner cannot 

agree upon an appropriate adjustment to 

the franchise fee that reflects the 

extraordinary, unanticipated changes 

determined by the concessioner and the 

Director. 

■ 10. Amend § 51.81 by revising 

paragraph (b) to read as follows: 

§ 51.81 May the Director include ‘‘special 

account’’ provisions in concession 

contracts? 

* * * * * 

(b) Concession contracts may contain 

provisions that require the concessioner 

to set aside a percentage of its gross 

receipts or other funds in a component 

renewal reserve to be used at the 

direction of the Director solely for 

renewal of real property components 

located in park areas and utilized by the 

concessioner in its operations. The 

anticipated timing and estimated costs 

of component renewal projects should 

be identified in the prospectus. 

Component renewal reserve funds may 

not be expended to construct real 

property improvements, including, 

without limitation, capital 

improvements. Component renewal 

reserve provisions may not be included 

in concession contracts in lieu of a 

franchise fee, and funds from these 

reserves will be expended only for the 

renewal of real property components as 

identified in the contract and assigned 

to the concessioner by the Director for 

use in its operations. The component 

renewal reserve provides a mechanism 

for a concessioner to reserve monies to 

fund component renewal projects. 

Concessioner obligations to maintain 

assigned concession facilities including 

component renewal are not limited to 

the monies in the component renewal 

reserve. 

* * * * * 

■ 11. Amend § 51.82 by revising 

paragraph (b) and adding paragraphs (c) 

and (d) to read as follows: 

§ 51.82 Are a concessioner’s rates 

required to be reasonable and subject to 

approval by the Director? 

* * * * * 

(b) The Director shall approve rates 

and charges that are reasonable and 

appropriate in a manner that is as 

prompt and as unburdensome to the 

concessioner as possible and that relies 

on market forces to establish the 

reasonableness of such rates and charges 

to the maximum extent practicable. 

Unless otherwise provided in the 

concession contract, the reasonableness 

and appropriateness of rates and charges 

shall be determined primarily by 

comparison with those rates and 

changes for facilities, goods and services 

of comparable character under similar 

conditions with due consideration to 

the following factors and other factors 

deemed relevant by the Director: length 

of season; peakloads; average percentage 

of occupancy; accessibility; availability 

and cost of labor; and types of 

patronage. 

(c) The Director shall identify the rate 

approval method to be used for each 

category of facilities, goods, and services 

to be provided when preparing the 

prospectus for a concession contract. 

The Director will use the least 

burdensome and most market-based 

comparability method. Unless the 

Director determines that market forces 

are not sufficient to determine 

reasonable and appropriate rates, the 

Director shall make a competitive 

market declaration as the means of 

comparability, and rates and charges 

will be approved based upon what the 

concessioner determines the market will 

bear. Other rate approval methods will 

be used only when the Director 

determines that market forces are 

inadequate to establish the 

reasonableness of rates and charges for 

the facilities, goods, or services. The 

Director will monitor rates and charges 

and competition and may change the 

rate approval method during the term of 

the contract to reflect changes in market 

conditions. 


ddrumheller on DSK120RN23PROD with RULES1
90120 Federal Register / Vol. 88, No. 249 / Friday, December 29, 2023 / Rules and Regulations 

(d) Each contract shall include a 

schedule for rate requests and describe 

the information necessary to include in 

a complete rate request. Upon receipt of 

a request for a change in rates or charges 

the Director shall, as soon as practicable 

but not more than 20 days of receipt of 

the request, provide the concessioner 

with a written determination that the 

request is complete, or where the 

Director determines the request 

incomplete, a description of the 

information required for the request to 

be determined complete. Where changes 

in rates and charges have been 

requested and the request has been 

deemed complete, concessioners shall 

be allowed to notify visitors making 

reservations 90 or more days in advance 

of the anticipated rates. Those rates are 

subject to adjustment prior to the visit 

based upon the Director’s review and 

final decision about the requested rate 

change . The Director shall issue a final 

decision approving or rejecting a request 

by a concessioner to change rates and 

charges to the public within 10 days of 

receipt of a complete request in 

accordance with the conditions 

described in the contract, except for 

those change requests requiring a full 

comparability study, for which the 

Director shall issue a decision as soon 

as possible and in no event longer than 

30 days after receipt of the complete 

request. If the Director does not approve 

of the rates and charges proposed by the 

concessioner, the Director must provide 

in writing the substantive basis for any 

disapproval. These timeframes will be 

exceeded only in extraordinary 

circumstances and the concessioner 

must be notified in writing of such 

circumstances. If the Director fails to 

meet the timeframes described above, 

and has not notified the concessioner in 

writing of the existence of extraordinary 

circumstances justifying delay, a 

concessioner may implement the 

requested change to rates and charges 

until the Director issues a final written 

decision. If the Director denies the 

requested change to rates and charges 

after implementation by the 

concessioner, the Director will not 

require the concessioner to retroactively 

adjust any rates or charges for services 

booked prior to the Director’s denial. 

Maureen Foster, 

Chief of Staff, Office of the Assistant Secretary 

for Fish and Wildlife and Parks. 

[FR Doc. 2023–28659 Filed 12–28–23; 8:45 am] 

BILLING CODE 4312–51–P 

DEPARTMENT OF VETERANS 

AFFAIRS 

38 CFR Part 70 

RIN 2900–AS03 

Changes in Rates VA Pays for Special 

Modes of Transportation; Delay of 

Effective Date 

AGENCY: Department of Veterans Affairs. 

ACTION: Final rule; delay of effective 

date. 

SUMMARY: The Department of Veterans 

Affairs (VA) published in the Federal 

Register on February 16, 2023, a final 

rule to amend its beneficiary travel 

regulations to establish a new payment 

methodology for special modes of 

transportation available through the VA 

beneficiary travel program. The 

preamble of that final rule stated the 

effective date was February 16, 2024. 

This rulemaking delays that effective 

date to February 16, 2025. 

DATES: The effective date for the final 

rule published February 16, 2023, at 88 

FR 10032, is delayed from February 16, 

2024, until February 16, 2025. 

FOR FURTHER INFORMATION CONTACT: Ben 

Williams, Director, Veterans 

Transportation Program (15MEM), 

Veterans Health Administration, 

Department of Veterans Affairs, 810 

Vermont Avenue NW, Washington, DC 

20420, (404) 828–5691. (This is not a 

toll-free number.) 

SUPPLEMENTARY INFORMATION: On 

November 5, 2020, VA proposed 

amending its beneficiary travel 

regulations to implement the 

discretionary authority in 38 U.S.C. 

111(b)(3)(C), which permits VA to pay 

the lesser of the actual charge for 

ambulance transportation or the amount 

determined by the Centers for Medicare 

and Medicaid Services (CMS) Medicare 

Part B Ambulance Fee Schedule 

(hereafter referred to the CMS 

ambulance fee schedule) established 

under section 1834(l) of the Social 

Security Act (42 U.S.C. 1395m(l)), 

unless VA has entered into a contract 

for that transportation. We provided a 

60-day comment period that ended on 

January 4, 2021, and we received six 

comments, five of which were 

substantive. Those five comments all 

raised similar concerns to 38 CFR 

70.30(a)(4) introductory text and (a)(4)(i) 

and (ii) as proposed, related to using the 

CMS ambulance fee schedule or, in the 

case of travel by modes other than 

ambulance, the posted rates from each 

State. We responded to all comments in 

a final rule published in the Federal 

Register on February 16, 2023 (88 FR 

10032), wherein we stated that we 

would not make changes from the 

proposed rule related to application of 

the CMS ambulance fee schedule but 

would delay the effective date of the 

final rule by one year (to be February 16, 

2024) to ensure that ambulance 

providers have adequate time to adjust 

to VA’s new methodology for 

calculating ambulance rates (88 FR 

10035). We further stated in the final 

rule that such adjustment could include 

ambulance providers entering 

negotiations with VA to contract for 

payment rates different than those 

under the CMS ambulance fee schedule, 

as contemplated in the final rule. 

Since publication of the final rule, 

however, VA has received feedback 

from both internal and external 

stakeholders, including VA employees, 

ambulance providers, and industry 

experts, that more time is necessary for 

successful implementation of the rule. 

Specifically, the delay of the effective 

date is necessary to accommodate 

unforeseen difficulties in air ambulance 

broker contracting. These difficulties 

relate to air ambulance brokers requiring 

a contract or subcontract in place with 

all potential air ambulance providers 

that covers emergency, non-VA initiated 

trips. Based on this feedback and 

evaluation of the continued effort that 

would be required by air ambulance 

brokers to negotiate and enter into 

contracts before February 16, 2024, VA 

is delaying the effective date of the 

regulation by one year. VA believes a 

12-month delay is appropriate based on 

its experience with contracting, 

especially in circumstances like this 

where subcontracting actions are 

required. 

Administrative Procedure Act 

The Administrative Procedure Act 

(APA), codified in part at 5 U.S.C. 553, 

generally requires that agencies publish 

substantive rules in the Federal Register 

for notice of proposed rulemaking and 

to solicit public comment. However, 

pursuant to 5 U.S.C. 553(b)(B) of the 

APA, general notice and the opportunity 

for public comment are not required 

with respect to a rulemaking when an 

‘‘agency for good cause finds (and 

incorporates the finding and a brief 

statement of reasons therefor in the 

rules issued) that notice and public 

procedure thereon are impracticable, 

unnecessary, or contrary to the public 

interest.’’ 

VA finds that there is good cause 

under the APA to issue this rule without 

prior notice and opportunity for public 

comment. The final rule published at 88 

FR 10032 will become effective 

February 16, 2024. Given the 


ddrumheller on DSK120RN23PROD with RULES1