NPS Requires Concessioner To Set Aside Funds For Personal Property Replacement and Repair

The National Park Service (NPS) issued a draft contract in a prospectus which required the concessioner to set aside two percent of the contract’s gross revenues for the purpose of “replacement, rehabilitation, and routine repair” of the personal property used in its operations.  NPS has for many years included a similar provision with regard to repair and maintenance of improvements, which it now refers to as the Component Renewal Reserve.  However, the requirement for such a reserve for personal property differs in that, unlike improvements, the concessioner owns all personal property and is not required to sell it to any succeeding concessioner.  In addition, unlike with the Component Renewal Reserve, a concessioner does not need advance approval from the agency to spend funds from the Personal Property Reserve.  As with NPS’ modified Component Renewal Fund provision, the draft contract states that any funds remaining in the Personal Property Reserve at the end of the contract are to be turned over to NPS “as a franchise fee or other monetary consideration.”