NPS recently issued guidelines for implementing its new regulation regarding rates charged by concessioners titled NPS Concession 2024 Concession Management Rate Administration Guide Addendum. The regulation itself is at 36 CFR § 51.82. A redlined version of § 51.82 showing the recent changes made to it is here.
The guidelines reflect the general preference set out in the new regulation for use of the competitive market declaration (CMD) rate approval method. The key aspects of the guidelines include a requirement that NPS use the CMD approval method unless NPS determines that market forces are inadequate. And this determination must be approved by the Regional Director.
Based on the wording of the new regulation, a concessioner can set its own rates without seeking NPS approval unless NPS has made a specific determination that the CMD rate method is not appropriate, regardless of the rate approval method that currently may be in place. The new guidelines for implementing the regulation, however, inconsistently suggest that a concessioner who is currently required to follow a different rate approval method in its operating plan must obtain NPS’ approval before changing its rate approval method over to the CMD method. Notwithstanding the language in the regulation, we recommend that you request NPS to make a determination whether the CMD method is appropriate for your contract if you believe your operations qualify for the CMD rate method and NPS has not made an explicit determination using the new guidelines that market forces are insufficient to control your prices.
The guidelines set out the process and timeframes NPS must follow in making this determination. The process includes an assessment of (1) the number of sellers in the market who are not NPS concessioners, (2) the similarity of products or services, (3) the distance to competitors, (4) information availability and (5) the critical nature of the services or products. For example, the guidelines note that similar lodging up to an hour away likely creates sufficient competition as does food and beverage options less than 30 minutes away.
As to the general process for NPS determining the appropriate rate approval method to be used for a particular concession contract, the guidelines state that the CMD method is preferred for all operations other than transportation (in which case, the comparability method is the preferred method). Where the CMD method is not appropriate, the guidelines state that the primary alternative rate approval method in most operations should be the Core method. Except for transportation services, the comparability method, which is the most cumbersome, is the least preferred method for lodging, food and beverage, retail merchandise, fuel and guided activities. Pursuant to these guidelines, in most cases the comparability rate approval method should only be used if none of the other methods are appropriate (with the exception of transportation services).
The new guidelines also provide further details as to how NPS will evaluate requests to change your rates under your rate approval method. NPS must inform a concessioner within 20 days as to whether the request to change rates is complete unless extraordinary circumstances exist justifying a longer time period. NPS must then make a decision on the rate change request within 10 days of the determination that the application is complete (unless the comparability method is being used, in which case NPS has 30 days to make a decision). If NPS does not comply with these deadlines, a concessioner may implement its requested rate changes. If NPS subsequently denies the requested rate change, no retroactive changes to the rates are required.
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Industry News
May 21, 2024 12:30:45 PM