Revenues Generated and Services Provided

As of April 2016, the Park Service had 488 concessions contracts in over  100 park units, and in 2015, such operations collectively generated about  $1.4 billion in gross revenues and paid about $104 million in franchise  fees to the Park Service. Challenges Highlighted in 2000 GAO Report

Our 2000 report on the concessions program, which we issued prior to  the implementation of the 1998 Concessions Act, highlighted three  management challenges:  Inadequate staff qualifications and training: We generally found that  Park Service staff at the headquarters, regional, and park unit levels  did not have the necessary skills or training to implement the program. We found that concessions staff were often transferred from other  career fields at the Park Service, such as interpretive or law  enforcement rangers and the agency’s view was that “anyone could  do concessions.”
Inability to manage contract workload and expired contracts: We  found that the Park Service was unable to manage its concessions  contract workload, and this had resulted in approximately 45 percent  of concessions contracts and permits (283 of 630) being expired as of  December 31, 1999, meaning that these contracts had exceeded their  original term and were under an extension. Specifically, the Park Service has hired  concessions staff with relevant skills or educational backgrounds, is using  consultants, and has increased training opportunities. In addition, the  Park Service has reduced the number of concessions contracts under  extension because it is issuing contracts on a regular basis. Since then, headquarters  has increased its involvement in the concessions program. While the Park Service has taken steps to obtain more centralized  information on the concessions program, we found that some  concessioners’ financial reports were missing or data contained in the  reports we reviewed were sometimes reported incorrectly. Without timely or accurate financial data from  concessioners, the agency could be limited in its ability to oversee certain  aspects of the concessions program such as determining whether  concessioners have paid their franchise fees. Concessions Program Continues to Face Challenges, Which the Park Service’s Strategic Plan May Address, but the Plan Is Missing Key Elements to Track Progress

In interviewing Park Service officials and concessioners, we identified  some challenges in the three steps of the concessions process:  prospectus development can be a lengthy and expensive process, and it  can be hard to generate competition for some contracts; the agency’s  evaluation panels can sometimes have difficulty assessing proposals, and  the award process can be lengthy; and contract management can be  affected by limited staffing and confusion about how to fund capital  improvements and maintenance. Confusion exists, in part, because the Park Service has not finalized  certain guidance or made it publicly available. For example,  the plan has a goal to improve the prospectus and contract award  process which aims to reduce costs and improve efficiency to the  government and bidders. Similarly, the plan aims to attract more bids for  concessions contracts, increase the accuracy of financial reporting, and  increase the percentage of concessions staff who receive training. As we previously found, a critical element in an organization’s efforts to  manage for results is its ability to set meaningful goals for performance  and to measure progress towards these goals. Without  clearly defined performance goals that would provide a basis against  which results can be compared, it will be difficult for the Park Service to  track its progress in these areas and determine where additional effort  may be needed to address identified challenges to the concessions  program. However, in some instances required reports from  concessioners were not provided on time or those submitted contained  incorrect financial data that was not identified in the review process. In addition, Park Service officials and concessioners identified ongoing  challenges with the concessions program. Recommendations for Executive Action

To help improve oversight of the concessions program, we recommend  that the Secretary of the Interior direct the Director of the National Park  Service to take the following three actions:  review the financial reporting process and make any necessary  adjustments to help ensure timely and accurate reporting of data on  annual financial reports;  finalize guidance on maintenance and capital improvements and  make it publicly available to concessioners; and develop performance goals with targets and timeframes in its  commercial services strategic plan. Appendix I: Objectives, Scope, and Methodology

Our objectives were to examine (1) how the concessions program has  changed since our 2000 report and (2) any ongoing challenges in the  concessions program. To address these objectives, we examined relevant laws, regulations, and  Park Service documents.
Why GAO Did This Study

The 1998 Concessions Management Improvement Act governs concessions services at national parks. In 2016, the Park Service managed 488 concessions contracts, and such contracts generated about $1.4 billion in gross revenues in the prior year. Under these contracts, companies and individuals operate businesses in parks, including lodges, restaurants, and recreational services. GAO was asked to review the concessions program.
This report examines (1) how the concessions program has changed since GAO's 2000 report and (2) any ongoing challenges in the concessions program. To conduct this work, GAO examined Park Service policy, guidance, and relevant laws and regulations; analyzed Park Service data on concessions contracts; interviewed Park Service staff at headquarters, all seven regions, and 20 park units, selected for size of concessions program and park type, among other things; and interviewed concessioners and stakeholders, such as consultants familiar with the concessions program.

What GAO Found

The Department of the Interior's National Park Service (Park Service) has made several changes to its concessions program since GAO issued a report on the program in 2000. In that report, GAO highlighted three management challenges: (1) inadequate qualifications and training of concessions staff; (2) backlog of expired contracts that were extended; and (3) lack of accountability in the concessions program. In this review, GAO found that the Park Service has taken steps to address these challenges:
Staff qualifications: Park Service has hired many concessions staff with relevant skills or educational backgrounds, such as in hospitality services or business. In addition, the Park Service developed several training classes for concessions staff to help improve their skills.
Contracts under extension: Park Service has reduced the percentage of extended contracts, from about 45 percent in 2000 to 28 percent in 2016.
Accountability: Park Service headquarters has increased its involvement in the concessions program and has centralized more information on the program. However, in some instances, GAO found that some financial reports that were to be submitted by concessioners to the Park Service were not submitted in a timely manner or data in the submitted reports were inaccurate. Park Service staff did not identify these discrepancies when reviewing the reports. Without timely and accurate financial data from concessioners, the agency could be limited in its ability to oversee certain aspects of the program such as determining whether concessioners paid required fees.
GAO identified some ongoing challenges in each of the three steps of the concessions process. First, developing a prospectus, which provides information on a concessions operation to potential bidders, can be a lengthy and expensive process, and it can be hard to generate competition. Second, the agency's evaluation panels can sometimes have difficulty assessing some proposals, and the award process can be lengthy. Third, contract management can be affected by limited staffing and confusion among concessioners about how to fund maintenance and capital improvements on buildings or land assigned to them by the Park Service. This situation is, in part, because the Park Service has not yet finalized related guidance and made it publicly available to concessioners. The Park Service's commercial services strategic plan recognizes many of the challenges GAO identified and lists goals to potentially address them. For example, the plan has a goal to improve the prospectus and contract award processes by reducing costs and improving efficiency to the government and bidders. In addition, the plan aims to attract more bids for concessions contracts, increase the accuracy of financial reporting, and increase the percentage of concessions staff that receive training. However, these goals do not have targets or timeframes for their completion. Leading practices indicate it is critical for an agency to set meaningful performance goals and to measure progress towards these goals. Without clearly defined performance goals that contain targets or timeframes, it will be difficult for the Park Service to track its progress in these areas and determine where additional effort may be needed to address identified challenges in the concessions program.

What GAO Recommends

GAO recommends that the Park Service review and adjust its process to help ensure timely and accurate reporting of financial data from concessioners, finalize its guidance and make it public, and develop performance goals with targets and timeframes in its commercial services strategic plan. The Department of the Interior agreed with GAO's recommendations.