NPS clarifies the meaning of a “controlling” and “ownership” interest in a concessioner

Your Government counsel.™

In a recent lawsuit, a disappointed offeror who submitted a proposal for a National Park Service concession contract asserted that the offeror which had been selected for award had a change in its controlling interest when a new company took control of the top corporation in the corporate family, which actively controlled the offeror through the intermediary companies.  Because all of the corporate entities were 100% owned and controlled by their direct parents, the disappointed offeror asserted that this change at the top constituted a change in the awardee’s controlling interest as well as ownership interest.  In response, NPS stated that it interprets the term “controlling interest” as well as “ownership interest” to only apply to the direct parent of the concessioner.

NPS stated that “NPS takes the position in practice that [the term controlling interest] applies only to a direct controlling interest, such as that of a parent corporation of the concessioner, and would not apply to a transfer of ownership of the parent of the parent of the concessioner.”  NPS further stated that while “the term ‘ownership interest’ is not defined by statute or regulation, the NPS takes the position in practice that this [term] applies only to entities with a direct ownership interest, and does not apply to indirect ownership such as ownership by virtue of owning a parent corporation’s parent corporation.”

While this recent statement by NPS appears to contradict NPS’s actual application of these terms based on many concessioners’ experience, it nonetheless should be taken into account by any concessioner or potential concessioner.

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