Amfac Resorts, L.L.C. v. United States Department of the Interior

United States Court of Appeals

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Argued November 6, 2001 Decided March 1, 2002

No. 01-5223

Amfac Resorts, L.L.C.,

Appellant

v.

United States Department of the Interior, et al.,

Appellees

Consolidated with

Nos. 01-5226, 01-5229, 01-5233

Appeals from the United States District Court

for the District of Columbia

(00cv02838)

(00cv02885)

(00cv02937)

(00cv03085)

---------

Kenneth S. Geller argued the cause for appellants. With

him on the briefs were David M. Gossett, Mark H. Lynch,

Robert A. Long Jr., Daniel F. Attridge, Robert R. Gasaway,

Ashley C. Parrish, Edward J. Shapiro and Eric J. Wycoff.

Marina Utgoff Braswell, Assistant U.S. Attorney, argued

the cause for appellees. With her on the brief were Roscoe

C. Howard Jr., U.S. Attorney, R. Craig Lawrence, Assistant

U.S. Attorney, and Michael A. Carvin.

Before: Randolph and Garland, Circuit Judges, and

Williams, Senior Circuit Judge.

Opinion for the Court filed by Circuit Judge Randolph.

Randolph, Circuit Judge: These are four consolidated

cases on appeal from the judgment of the district court

sustaining regulations of the National Park Service governing

concession contracts in the National Park System. Many of

the issues are tied to the history of the National Park System

and the functions concessioners perform in the operation of

the parks.

The history begins with the discovery of "Old Faithful" and

the other natural wonders of what is now Yellowstone Nation-

al Park. In 1872, Congress withdrew the land at the headwa-

ters of the Yellowstone River from "settlement, occupancy, or

sale," thus creating the first national park in the United

States. Act of Mar. 1, 1872, ch. 24, s 1, 17 Stat. 32. See also

Aubrey L. Haines, Yellowstone National Park: Its Explora-

tion and Establishment (1974). Not everyone had been

enthusiastic about the plan to create Yellowstone National

Park. A local newspaper editorial worried that "the effect of

this measure will be to keep the country a wilderness, and

shut out, for many years, the travel that would seek that

curious region if good roads were opened through it and

hotels built therein." Haines, supra, at 127 (quoting the

Helena Daily Herald of Mar. 1, 1872). In the final legisla-

tion, Congress responded by authorizing the Secretary of the

Interior to lease portions of the park for "the erection of

buildings for the accommodation of visitors." 17 Stat. 33.

As the United States withdrew more areas from the public

domain, it continued to favor the interests of park visitors.

In creating the National Park Service in 1916, Congress

authorized the Interior Secretary to "grant privileges, leases,

and permits for the use of land for the accommodation of

visitors" to each of the "various parks, monuments, or other

reservations" under the Secretary's authority. An Act to

Establish a National Park Service, ch. 408, 39 Stat. 595

(1916). In the view of the first director of the Park Service,

Stephen Mather: "Scenery is a hollow enjoyment to a tourist

who sets out in the morning after an indigestible breakfast

and a fitful sleep in an impossible bed." Dennis J. Herman,

Loving Them to Death: Legal Controls on the Type and

Scale of Development in the National Parks, 11 Stan. Envtl.

L.J. 3, 3 (1992).

During its first thirty years, the Park Service followed

internal regulations and policies governing concessioners and

their obligations to park visitors and to the national park

lands. The government also offered financial inducements to

private contractors to convince them to provide and operate

facilities in what were often remote locations. See Park

Concession Policy: Hearings Before the Subcomm. on Na-

tional Parks of the House Comm. on Interior and Insular

Affairs, 88th Cong. 5-8 (1964) [hereinafter Park Concession

Policy Hearings] (letter from John A. Carver, Jr., Assistant

Secretary of the Interior).

For our purposes the most significant of these incentives

was a preferential right of renewal, which "contemplated that

every existing contract covering public operations [in the

national parks] will be renewed at the expiration thereof,

provided, of course, that full and satisfactory service to the

public had been given thereunder." Memorandum for the

Acting Under Secretary, U.S. Department of the Interior

(Aug. 10, 1940). When the Interior Department sought to

change its policies and withdraw some of these financial

incentives in the late 1940s, the concessioners and some in

Congress balked. See H.R. Res. 66, 81st Cong. (1950), passed

by the Comm. on Public Lands and included in H.R. Rep. No.

81-3133, at 5-6 (1950). In response, the Secretary announced

new guidelines for concession contracts and preserved many

of the existing financial incentives for concessioners, including

the preferential right of renewal. Id. at 4-5. The House

Committee on Public Lands passed a resolution endorsing

these new guidelines, although the resolution of course had no

legal effect. INS v. Chadha, 462 U.S. 919 (1983).

By the 1960s, other House committees started expressing

doubt about the soundness of the Interior Department's

contracting policies, particularly the financial incentives it was

giving concessioners. See House Comm. on Government Oper-

ations, Survey of Selected Activities, H.R. Rep. No. 88-306,

pt. 3, at 4-12 (1963) ("The committee's inquiry disclosed

considerable weakness in the National Park Service's opera-

tions in several matters involving concessioners in the nation-

al parks."). When Congress considered the 1964 appropria-

tions bill for the Department of the Interior, the House

Committee on Appropriations recommended that "competitive

bidding should be required for concession contracts, in lieu of

the current practice of granting preferential opportunities to

existing concessioners to negotiate new contracts." Depart-

ment of the Interior and Related Agencies Appropriation

Bill, H.R. Rep. No. 88-177, at 10 (1963).

Concerned that "certain other committees that do not have

jurisdiction" had "attempted to get into the problem of con-

cessions," the House Committee on Interior and Insular

Affairs produced a bill to "put into statutory form" the

longstanding concessions policies of the Park Service, includ-

ing the preferential right of renewal. H.R. Rep. No. 89-591,

at 1 (1965); Park Concession Policy Hearings at 19. In

1965, these concession policies were enacted into law. See

111 Cong. Rec. 23,632-48 (1965). Part of the legislation

provided that the "Secretary [of the Interior] shall ... giv[e]

preference in the renewal of contracts or permits and in the

negotiation of new contracts or permits to the concessioners

who have performed their obligations ... to the satisfaction

of the Secretary." National Park Service Concessions Policy

Act, Pub. L. No. 89-249, s 5, 79 Stat. 969, 970 (1965),

repealed by National Parks Omnibus Management Act of

1998, Pub. L. No. 105-391, s 415(a), 112 Stat. 3497, 3515.

The preference gave "incumbent concessioners, upon renewal,

the right to meet any better offer received" by the Park

Service. U.S. Dep't of the Interior, Report of the Task

Force on National Park Service Concessions 10 (1990).

The 1965 Act governed all concession contracts entered into

by the Park Service. Concessioners paid the government a

franchise fee, typically less than five percent of gross reve-

nues, for the privilege of operating on federal land. If they

used government-owned facilities they paid an additional fee.

In 1998, after several aborted attempts, Congress repealed

the preferential right of renewal and enacted other rules

governing concession contracts. National Parks Omnibus

Management Act of 1998, 16 U.S.C. ss 5951-5966.

Plaintiffs are three companies who have current conces-

sions contracts with the Park Service and an association of

concessioners. They brought four separate actions challeng-

ing the Park Service regulations, issued in 2000, to implement

the 1998 Act. 65 Fed. Reg. 20,630 (Apr. 17, 2000) (to be

codified at 36 C.F.R. pt. 51). The district court consolidated

the four lawsuits, and granted summary judgment to the

government on all of the claims save one (which has not been

appealed to this court). Amfac Resorts v. United States

Dep't of the Interior, 142 F. Supp. 2d 54 (2001).

I.

The first issue centers on the 1998 Act's repeal of the

statutory preferential right of renewal in s 5 of the 1965 Act.

The 1998 Act provided that, except for small contracts and

outfitter and guide services, "the Secretary shall not grant a

concessioner a preferential right to renew a concessions con-

tract." 16 U.S.C. s 5952(7). A savings clause in the 1998

Act, s 415(a), states: "repeal of [the 1965 Act] shall not affect

the validity of any concessions contract or permit entered into

under such Act, but the provisions of this title shall apply to

any such contract or permit except to the extent such provi-

sions are inconsistent with the terms and conditions of any

such contract or permit." Pub. L. No. 105-391, s 415(a), 112

Stat. 3497, 3515 (1998).

The Park Service interpreted the repealing and the savings

clauses in the following narrative regulation:

s 51.102 What is the effect of the 1998 Act's repeal

of the 1965 Act's preference in renewal?

(a) Section 5 of the 1965 Act required the Secretary to

give existing satisfactory concessioners a preference in

the renewal (termed a "renewal preference" in the rest of

this section) of its concession contract or permit. Section

415 of the 1998 Act repealed this statutory renewal

preference as of November 13, 1998. It is the final

decision of the Director, subject to the right of appeal set

forth in paragraph (b) of this section, that holders of 1965

Act concession contracts are not entitled to be given a

renewal preference with respect to such contracts (al-

though they may otherwise qualify for a right of prefer-

ence regarding such contracts under Sections 403(7) and

(8) of the 1998 Act as implemented in this part). Howev-

er, if a concessioner holds an existing 1965 Act conces-

sion contract and the contract makes express reference

to a renewal preference, the concessioner may appeal to

the Director for recognition of a renewal preference.

(b) Such appeal must be in writing and be received by

the Director no later than thirty days after the issuance

of a prospectus for a concession contract under this part

for which the concessioner asserts a renewal preference.

The Director must make a decision on the appeal prior to

the proposal submission date specified in the prospectus.

Where applicable, the Director will give notice of this

appeal to all potential offerors that requested a prospec-

tus. The Director may delegate consideration of such

appeals only to a Deputy or Associate Director. The

deciding official must prepare a written decision on the

appeal, taking into account the content of the appeal and

other available information.

(c) If the appeal results in a determination by the Di-

rector that the 1965 Act concession contract in question

makes express reference to a renewal preference under

section 5 of the 1965 Act, the 1998 Act's repeal of section

5 of the 1965 Act was inconsistent with the terms and

conditions of the concession contract, and that the holder

of the concession contract in these circumstances is enti-

tled to a renewal preference by operation of law, the

Director will permit the concessioner to exercise a re-

newal preference for the contract subject to and in

accordance with the otherwise applicable right of prefer-

ence terms and conditions of this part, including, without

limitation, the requirement for submission of a respon-

sive proposal pursuant to the terms of an applicable

prospectus. The Director, similarly, will permit any

holder of a 1965 Act concession contract that a court of

competent jurisdiction determines in a final order is

entitled to a renewal preference, for any reason, to

exercise a right of preference in accordance with the

otherwise applicable requirements of this part, including,

without limitation, the requirement for submission of a

responsive proposal pursuant to the terms of an applica-

ble prospectus.

36 C.F.R. s 51.102 (2001).

The Park Service thus will not recognize a preferential

right of renewal for concessioners whose pre-1998 contracts

are expiring, unless the contract expressly so provides. See

65 Fed. Reg. at 20,631-33. In the language of the savings

clause of s 415(a), without such contractual "terms and condi-

tions" it would not be "inconsistent"--as the Park Service

sees it--to refuse to allow a preferential right of renewal.

A typical concession contract runs for 15 or 20 years.

Report of the Task Force on National Park Service Conces-

sions, supra, at 5. One of the plaintiffs, Amfac Resorts,

L.L.C., had a 30-year contract for the Grand Canyon. A

right of renewal for pre-1998 contracts is therefore a matter

of great interest to those holding these contracts. The

concessioners say that the renewal provision of the 1965 Act

represented an "entrenched policy"; that the policy was

incorporated by law as an unwritten term in every concession

contract signed between 1965 and 1998; and that the Park

Service regulation violates s 415 of the 1998 Act (the savings

clause) because it allows a preferential right of renewal only if

contracts before the 1998 Act expressly so state.

A.

The concessioners' argument in favor of an "implied" right

of renewal initially rests on the "Christian doctrine," named

after G.L. Christian & Assocs., 312 F.2d 418, 424 (Ct. Cl.

1963). As they explain it, the doctrine requires "that long-

standing and deeply-ingrained agency policies, such as the

[Park Service's] entrenched policy of granting concessioners

renewal rights in exchange for concessioner investments,

form a mandatory part of all government contracts." Brief

for Appellants at 21.

The Federal Circuit has, on occasion, concluded that cer-

tain statutory or regulatory provisions may become part of a

government contract even though the contract does not con-

tain language to that effect. See S.J. Amoroso Constr. Co. v.

United States, 12 F.3d 1072, 1075 (Fed. Cir. 1993); General

Engineering & Machine Works v. O'Keefe, 991 F.2d 775, 779

(Fed. Cir. 1993).

Our court has never adopted the Federal Circuit's Chris-

tian doctrine. Even if we did so, it would boot the conces-

sioners nothing. In describing the doctrine, they have omit-

ted a crucial element. The Federal Circuit does not hold that

significant or important federal policies "form part of govern-

ment contracts even where absent from those contracts'

explicit text." Brief for Appellants at 22. If that were the

law, Congressional power to make adjustments in legislation

would be greatly constricted. Statutory provisions would live

on as part of long-term contracts well after their repeal or

modification. This is why, as the Supreme Court put it in

Dodge v. Board of Education, 302 U.S. 74, 79 (1937), there is

a "presumption" that "a law is not intended to create private

contractual or vested rights but merely declares a policy to be

pursued until the legislature shall ordain otherwise." To this

the Court added in Nat'l R.R. Passenger Corp. v. Atchison,

Topeka & Santa Fe Ry., 470 U.S. 451, 465-66 (1985) [herein-

after Atchison]: "Policies, unlike contracts, are inherently

subject to revision and repeal, and to construe laws as

contracts when the obligation is not clearly and unequivocally

expressed would be to limit drastically the essential powers of

a legislative body." It is true, as the concessioners point out,

that the holding of Atchison was that a statute did not itself

create a contract. Reply Brief for Appellants at 12. But it is

not true that the case is therefore "irrelevant." Id. The

Court's reasoning applies equally to claims, such as the

concessioners', that a statute (here the 1965 Act) created a

contractual obligation in all contracts executed before its

repeal. See General Motors Corp. v. Romein, 503 U.S. 181,

190 (1992).

One element of the Christian doctrine, the element missing

from the concessioners' statement of the law, saves it from

contradicting this line of Supreme Court authority. Accord-

ing to the Federal Circuit, it is not enough that the legislative

or regulatory provision is important or significant (assuming

one could make such rankings). To constitute a contractual

obligation even though not written in the contract, the provi-

sion must be a mandatory contract clause, a clause the

legislation--or as in Christian, 312 F.2d at 424, the regula-

tion--requires to be included in contracts. Thus, "a mandato-

ry contract clause that expresses a significant or deeply

ingrained strand of public procurement policy is considered to

be included in a contract by operation of law." S.J. Amoroso

Constr. Co. v. United States, 12 F.3d at 1075. And the

Christian doctrine "applies to mandatory contract clauses

which express a significant or deeply ingrained strand of

public procurement policy." General Engineering & Ma-

chine Works v. O'Keefe, 991 F.2d at 779.

The renewal provision contained in s 5 of the 1965 Act was

by no stretch a mandatory contract term. The Secretary's

contracting authority was derived from a different part of the

1965 Act--s 3, which authorized the Secretary to "include in

contracts" such "terms and conditions as, in his judgment, are

required to assure the concessioner of adequate protection

against loss of investment ... resulting from discretionary

acts, policies, or decisions of the Secretary occurring after the

contract has become effective...." s 3, 79 Stat. 969. Sec-

tion 5 of the 1965 Act was of another sort. It stated that the

Secretary "shall ... giv[e] preference in the renewal of

contracts or permits...." s 5, 79 Stat. 970. Rather than

leaving the matter to individual negotiations, s 5 required the

Secretary to grant a right of renewal to all concessioners,

regardless of the terms of their individual concession con-

tracts. The provision thus constituted "legislation which

merely declares a state policy, and directs a subordinate body

to carry it into effect." Dodge v. Bd. of Educ., 302 U.S. at 78.

We agree with the district court that if s 5 meant that the

Secretary had to insert a preferential right of renewal clause

in all concession contracts, one would have expected a di-

rection, or at least an authorization, to this effect. 142 F.

Supp. 2d at 72. There is none.

It is possible that some parties nevertheless insisted on

having a right of renewal written into their contracts and that

the Secretary yielded. Possible, but not likely. The conces-

sioners have identified no such contract and the Park Service

is aware of none. 65 Fed. Reg. at 20,664. The Service's

standard-form concession contract, in effect from 1965 to

1998, contained no right-of-renewal clause. See 65 Fed. Reg.

at 20,632. The regulation under the 1998 Act nevertheless

allows for the possibility and, in compliance with the saving

clause, states that if a concession contract contains an express

right of renewal the Secretary will honor it. 36 C.F.R.

s 51.102(c) (2000).

B.

Apart from the Christian doctrine, each of the concession-

ers maintains that the Park Service's regulation is "facially

invalid because [it denies] altogether the possibility of implied

contractual rights in individual cases" and prevents "any

concessioner in a future proceeding from offering specific

evidence of a bargained-for and mutually-agreed upon con-

tractual renewal right. If even one concessioner has such

evidence, the regulations denying those rights across-the-

board are unlawful." Brief for Appellants at 26, 27. In other

words, although the regulation is valid as applied to dozens of

concession contracts, it is invalid because of the possibility

that one concessioner might have an implied--that is, an

unwritten--preferential right of renewal. The argument,

aimed at the validity of the regulation on its face, does not

accurately state the law.

In United States v. Salerno, 481 U.S. 739, 745 (1987), the

Supreme Court stated:

A facial challenge to a legislative Act is, of course, the

most difficult challenge to mount successfully, since the

challenger must establish that no set of circumstances

exists under which the Act would be valid. The fact that

the [statute] might operate unconstitutionally under

some conceivable set of circumstances is insufficient to

render it wholly invalid, since we have not recognized an

"overbreadth" doctrine outside the limited context of the

First Amendment.

Justice Stevens believes that only the second sentence of the

Salerno excerpt states the governing principle for facial

challenges. He and Justice Scalia have debated whether the

first sentence from Salerno--what has become known as the

"no-set-of-circumstances" test--is instead controlling. See

City of Chicago v. Morales, 527 U.S. 41, 55 (1999) (plurality

opinion by Stevens, J., joined by Justices Souter and Gins-

burg); id. at 74-83 (Scalia, J., dissenting). See also

Anderson v. Edwards, 514 U.S. 143, 155 n.6 (1995); Santa Fe

Indep. Sch. Dist. v. Doe, 530 U.S. 290, 318 (2000) (Rehnquist,

C.J., joined by Justices Scalia and Thomas, dissenting). For

our part, we have invoked Salerno's no-set-of-circumstances

test to reject facial constitutional challenges. See, e.g., James

Madison Ltd., by Hecht v. Ludwig, 82 F.3d 1085, 1101 (D.C.

Cir. 1996); Chemical Waste Mgmt., Inc. v. EPA, 56 F.3d

1434, 1437 (D.C. Cir. 1995); Steffan v. Perry, 41 F.3d 677, 693

(D.C. Cir. 1994) (en banc).

The facial attack on s 51.102 is not, of course, on the basis

that the regulation is unconstitutional. The claim is that

s 51.102 conflicts with s 415 of the 1998 Act. In National

Mining Ass'n v. Army Corps of Engineers, 145 F.3d 1399,

1407 (D.C. Cir. 1998), we declined to adopt the Salerno test in

a comparable case, stating that the "Supreme Court has

never adopted a 'no set of circumstances' test to assess the

validity of a regulation challenged as facially incompatible

with governing statutory law."

Our examination of Supreme Court precedent in National

Mining apparently overlooked Reno v. Flores, 507 U.S. 292

(1993). There a class of alien juveniles, arrested on suspicion

of being deportable and then detained pending deportation

hearings, claimed that a regulation preventing their release

except to close relatives violated the Due Process Clause and

conflicted with the underlying statute. The Court, speaking

through Justice Scalia, described the case as involving only a

facial challenge to the regulation and then held as follows:

"To prevail in such a facial challenge, respondents 'must

establish that no set of circumstances exists under which the

[regulation] would be valid.' United States v. Salerno, 481

U.S. 739, 745 (1987). That is true as to both the constitution-

al challenges, see Schall v. Martin, 467 U.S. 253, 268, n. 18

(1984), and the statutory challenge, see [INS v. National

Center for Immigrants' Rights, 502 U.S. 183, 188 (1991)

[hereinafter NCIR]]." 507 U.S. at 301. See Public Lands

Council v. Babbitt, 167 F.3d 1287, 1301 (10th Cir. 1999)

(applying the Reno v. Flores formulation to a statutory

challenge to a regulation). Cf. Pharmaceutical Research &

Mfrs. v. Concannon, 249 F.3d 66, 77 (1st Cir. 2001) (applying

Salerno in a preemption case). See also Marc E. Isserles,

Overcoming Overbreadth: Facial Challenges and the Valid

Rule Requirement, 48 Am. U. L. Rev. 359, 405 (1998).

When an intervening Supreme Court decision alters the

law of the circuit, a panel of our court must follow the Court's

decision in all later cases. See, e.g., McKesson Corp. v.

Islamic Republic of Iran, 52 F.3d 346, 350 (D.C. Cir. 1995);

National Treasury Employees Union v. FLRA, 30 F.3d 1510,

1516 (D.C. Cir. 1994). But here the Supreme Court decision

was not intervening; it was rendered before National Min-

ing. Whether despite Reno v. Flores, National Mining

therefore must stand as circuit law unless and until the full

court overrules it is a question unnecessary for us to answer.

See LaShawn A. v. Barry, 78 F.3d 1389, 1395 (D.C. Cir. 1996)

(en banc). National Mining dealt only with the no-set-of-

circumstances formulation of Salerno. It did not mention

NCIR, the opinion cited in Reno v. Flores for the proposition

that Salerno applied to statutory challenges. Justice Ste-

vens, writing for the Court in NCIR, held: "That the regula-

tion may be invalid as applied in some cases, however, does

not mean that the regulation is facially invalid because it is

without statutory authority." 502 U.S. at 188. NCIR, with-

out citing Salerno, echoed in a non-constitutional setting the

sentence in Salerno following the no-set-of-circumstances

test--"The fact that the [statute] might operate unconstitu-

tionally under some conceivable set of circumstances is insuf-

ficient to render it wholly invalid," 481 U.S. at 745. See

Janklow v. Planned Parenthood, 517 U.S. 1174 (1996) (memo-

randum of Stevens, J., on denial of certiorari).

Either formulation--the no-set-of-circumstances test

adopted from Salerno in Reno v. Flores, or the less strict

NCIR standard--may pose potential problems for judicial

review of agency regulations, especially in this circuit. Lack-

ing a rulemaking record containing evidence relating to the

rule's application to a particular entity, petitioners ordinarily

mount only facial attacks, often on the ground that the

agency's product conflicts with the statute. In such cases,

the consequence of upholding the regulation because it is not

invalid in all its applications (Reno v. Flores), or because it is

invalid in only some of its applications (NCIR), may be that

petitioners would have to make their challenge in another

circuit and in another setting, in defense of an enforcement

action for instance. Some of the statutes governing jurisdic-

tion prescribe a specific time period for judicial review of

regulations, restrict venue to our circuit, and may prohibit

review outside the time period, except in limited circum-

stances. See, e.g., Clean Air Act, 42 U.S.C. s 7607(b); Com-

prehensive Environmental Response, Compensation, and Lia-

bility Act of 1980 (CERCLA), 42 U.S.C. s 9613(a); Adamo

Wrecking Co. v. United States, 434 U.S. 275 (1978); United

States v. Ethyl Corp., 761 F.2d 1153 (5th Cir. 1985); Frede-

rick Davis, Judicial Review of Rulemaking: New Patterns

and New Problems, 1981 Duke L.J. 279, 285-90. Although

one court has held that the Clean Air Act, 42 U.S.C.

s 7607(b), deprived it of jurisdiction to review EPA regula-

tions when they are applied, see Potomac Elec. Power Co. v.

EPA, 650 F.2d 509, 513 (4th Cir. 1981), we have ruled that

preclusion must be explicit for review to be barred in an

enforcement action, see Indep. Cmty. Bankers of Am. v. Bd.

of Governors of Fed. Reserve Sys., 195 F.3d 28, 34 (D.C. Cir.

1999), and that even express preclusion may not operate when

the issue would have been unripe during the period of statu-

tory review. See Clean Air Implementation Project v. EPA,

150 F.3d 1200, 1204 (D.C. Cir. 1998). Perhaps the congres-

sional intent reflected in judicial review provisions such as

s 7607(b) of the Clean Air Act may also demand adjustments

in the Reno v. Flores or NCIR test for reviewing facial

attacks on regulations, assuming the tests are not constitu-

tionally compelled. See City of Chicago v. Morales, 527 U.S.

at 77 (Scalia, J., dissenting).

Whatever the outcome in such cases, the situation here is

not comparable. Our circuit does not have exclusive jurisdic-

tion over Park Service regulations, and judicial review is not

confined to a particular time period. Nothing would preclude

a concessioner from bringing an action for a declaratory

judgment that the regulation, as applied to the concessioner,

deprives it of a contractual right in violation of the savings

clause. In fact, one of the consolidated actions in the district

court was such a suit. Amfac's complaint alleged that its

1969 contract for the Grand Canyon was about to expire, that

the contract contained an implied preferential right of renew-

al arising "from the circumstances of the formation of the

1969 contract," that the Park Service's regulation denied the

existence of such an implied term, and that the regulation as

applied to Amfac therefore violated s 415 of the 1998 Act.

Although s 51.102 may be valid on its face, this would not

necessarily doom Amfac's as-applied challenge.

With this in mind, we return to the concessioners' assertion

that if "even one concessioner has [evidence showing an

implied right of renewal], the regulations denying those rights

across-the-board are unlawful." Brief for Appellants at 27.

We do not need to choose between Reno v. Flores or NCIR to

dispose of that contention. Not even First Amendment over-

breadth analysis--which embodies a far more difficult stan-

dard for laws to satisfy than the one the Court formulated in

Salerno--would render a law facially invalid because of the

prospect of a single invalid application. An overbreadth

attack will succeed only if the legislation is substantially

overbroad--that is, only if the law "reaches a substantial

number of impermissible applications." New York v. Ferber,

458 U.S. 747, 771 (1982). That there might be one invalid

application is therefore far from enough to make the regula-

tion unlawful under any of the standards we have mentioned.

Perhaps recognizing as much, the concessioners assert that

"some contracts might as a factual matter include the [renew-

al] right as a bargained-for term," a "possibility" (despite

obstacles posed by the parol evidence rule and perhaps

statutes of fraud) they think is enough to render the regula-

tion unlawful. Brief for Appellants at 29. But far more is

demanded before a regulation may be declared facially inval-

id. Under Reno v. Flores, s 51.102 must of course be

sustained on its face because there are circumstances in

which applying the regulation would not be inconsistent with

s 415 of the 1998 Act. The regulation's requirement of an

express contract term, for instance, properly eliminates

claims of an implied renewal right based on the Christian

doctrine alone. Even under the more relaxed standard of

NCIR, it is not enough that "some contracts might as a

factual matter" contain an implied renewal right. To repeat,

that "the regulation may be invalid as applied in some cases,

however, does not mean that the regulation is facially invalid

because it is without statutory authority." NCIR, 502 U.S. at

188. We therefore reject the concessioners' facial attack on

s 51.102.

In reaching this result we have followed a course different

than that of the district court. We should explain why. The

district court thought the "lawfulness of the defendants'

regulations turns on whether the plaintiffs each have a con-

tractual right to preference renewal." 142 F. Supp. 2d at 71.

With this we agree. We also agree--as our discussion of the

Christian doctrine indicates--with the district court's conclu-

sion that the 1965 Act did not itself confer a contractual

renewal right on the concessioners. Id. at 72. As to the

concessioners' allegations that they had an implied-in-fact

contract embodying their right of renewal, the court rejected

these claims on the basis that "the administrative record

provides no indication that the parties had the mutual under-

standing that the contract contained the renewal terms." Id.

at 73. (The court must have had in mind all existing conces-

sion contracts, not just one.) The court added that the

administrative record "is wholly devoid of information sug-

gesting that the [Park Service] intended the renewal term to

be part of the contract." Id. But that is entirely under-

standable in light of the fact that the Park Service's proposed

rule dealing with rights of renewal did not contain the restric-

tion requiring the renewal right to be spelled out as an

express term. See Concessions Contracts, 64 Fed. Reg.

35,516, at 35,535 (proposed June 30, 1999). The concessioners

thus had no reason to submit evidence of implied renewal

rights in each of their contracts, assuming this sort of evi-

dence would have been allowed in the rulemaking proceeding

or could have been mustered. Moreover, the Park Service

never indicated that its final regulation rested on the district

court's rationale. See SEC v. Chenery, 332 U.S. 194, 196

(1947). After denying that the right could be inferred from

the 1965 Act, the Park Service explained that an implied

renewal right "is inconsistent with the express terms of

almost all current NPS concession contracts," 65 Fed. Reg. at

20,633. Most contracts, according to the Park Service, con-

tained a provision along these lines:

This Contract [or permit] and the administration of it by

the Secretary shall be subject to the laws of Congress

governing the Area and rules, regulations and policies

whether now in force or hereafter enacted or promulgat-

ed.

Id. But that begs the question the concessioners posed here

(and in the rulemaking, see Comments of the National Park

Hospitality Ass'n at 23 (Oct. 14, 1999)). The savings clause of

the 1998 Act is one of the "laws of Congress" to which this

contractual provision refers. If a concessioner has an implied

right of renewal in a pre-1998 contract, the savings clause

preserves it. The Park Service does not deny the possibility

of an implied contractual provision--that is, an unwritten

one--in government contracts. See Willard L. Boyd, III &

Robert K. Huffman, The Treatment of Implied-in-Law and

Implied-in-Fact Contracts and Promissory Estoppel in the

United States Claims Court, 40 Cath. U. L. Rev. 605 (1991);

Michael C. Walch, Note, Dealing with a Not-so-Benevolent

Uncle: Implied Contracts with Federal Government Agen-

cies, 37 Stan. L. Rev. 1367 (1985). The district court, quoting

Hercules, Inc. v. United States, 516 U.S. 417, 424 (1996),

summarized the law on the subject: an implied-in-fact con-

tract requires a meeting of the minds, which may be inferred

from the "conduct of the parties showing, in light of the

surrounding circumstances, their tacit understanding." The

concessioners alleged that there have been such meetings of

the mind, at least in some instances. Nonetheless, we agree

with the district court that the regulation is facially valid. As

we explained earlier, the possibility that one or some conces-

sioners had an implied-in-fact renewal right is not a sufficient

basis for holding s 51.102 of the regulations invalid on its

face.

This still leaves the allegations in Amfac's complaint that

s 51.102 was inconsistent with the savings clause of the 1998

Act as applied to Amfac's concession contract for the Grand

Canyon. Complaint of Amfac Resorts at p p 21, 41. Amfac

entered into that contract in 1969. The contract expired on

December 31, 2001, after the district court's judgment. Am-

fac turned out to be the only offeror and so the government

argues that its as-applied challenge to the right-of-renewal

regulation is moot: "Amfac can have no 'preference' for [the

Park Service] to consider when there are no other offerors."

Brief for Appellees at 33. Even if Amfac eventually won the

Grand Canyon contract, a subject about which we are not

informed, we do not believe its as-applied challenge would

necessarily be moot. Amfac argues that because s 51.102

threw its alleged implied renewal right in doubt, it "was

forced to bid more generously for the Grand Canyon contract

than it otherwise would have." Reply Brief for Appellants at

16. If this assertion can be proven, see Lujan v. Defenders of

Wildlife, 504 U.S. 555 (1992), then Amfac continues to suffer

an injury and the case is not moot. See Scheduled Airlines

Traffic Offices v. Dep't of Def., 87 F.3d 1356, 1358 (D.C. Cir.

1996).

Amfac can succeed in its claim that the regulation is invalid

as-applied to its 1969 Grand Canyon contract only if it can

prove the essential predicate--that the regulation, in contra-

diction to the savings clause of the 1998 Act, deprived it of a

contractual right. Amfac therefore should be allowed to

adduce proof of its alleged implied right of renewal and

should be permitted reasonable discovery to this end. The

district court refused to allow any discovery on the ground

that judicial review of the regulation must be confined to the

administrative record, except in limited circumstances not

presented here. 143 F. Supp. 2d at 10-13. See Am. Bankers

Ass'n v. Nat'l Credit Union Admin., 271 F.3d 262, 266-67

(D.C. Cir. 2001); Esch v. Yeutter, 876 F.2d 976, 991-92 (D.C.

Cir. 1989). We said in American Bankers, with respect to a

claim that a regulation conflicted with a statute, that the

court did not even need the administrative record to deter-

mine the validity of the regulation. 271 F.3d at 266-67. But

we were speaking there of a facial attack on the regulation.

We agree with the district court's denial of discovery to that

extent. Amfac's as-applied claim is another matter. Its

evidence of an implied renewal right would not be presented

to show what the Park Service did or did not consider in

promulgating s 51.102 of the regulations. It would be pre-

sented instead to show that the regulation would deprive it of

a contractual right in contravention of the savings clause in

the 1998 Act. In this respect, the evidence Amfac proposes

to adduce is akin to proof of its injury. Those challenging

agency action must establish that they have standing and to

do this, they must prove that the action causes injury to

them. Lujan, 504 U.S. at 560-61. They are not confined to

the administrative record. Far from it. Beyond the pleading

stage, they must support their claim of injury with evidence.

Id. So here. In mounting an as-applied challenge to a

regulation, whether in defense of an enforcement action or as

here in an action for a declaratory judgment, the party

making the challenge may--indeed, in most instances must--

present evidence outside the administrative record to show

why its particular circumstances render the regulation unlaw-

ful.

We therefore reverse the district court's grant of summary

judgment on Amfac's as-applied challenge to the prospectus

for concessions at the Grand Canyon National Park. In

doing so, we recognize that one of the claims of another

plaintiff, Hamilton Stores, Inc., might be construed as an as-

applied challenge similar to that of Amfac. Complaint of

Hamilton Stores, Inc. at p 21. But the concessioners' brief

presents no argument to this effect; in fact, neither the

concessioners' brief nor their reply brief even mentions this

portion of the Hamilton Stores complaint. We thus view the

claim, which the district court rejected, as having been waived

on appeal. See, e.g., Doe v. Dist. of Columbia, 93 F.3d 861, 875

n.14 (D.C. Cir. 1996) (per curiam).

II.

A.

The 1998 Act, as did the 1965 Act, recognized that the

United States owns all capital improvements constructed on

federal land within the National Park System. 16 U.S.C.

s 5954(d). Nonetheless, the 1998 Act gave concessioners a

"leasehold surrender interest" in any "capital improvement"

the concessioner "constructs" "pursuant to a concession con-

tract." 16 U.S.C. s 5954(a). The Act defines "capital im-

provement" as "a structure, fixture, or nonremovable equip-

ment provided by a concessioner pursuant to the terms of a

concession contract." 16 U.S.C. s 5954(e). When the conces-

sion contract expires or is terminated, the incumbent is

entitled to receive from its successor (or the government) the

value of this interest. 16 U.S.C. s 5954(c). The amount of

each concessioner's "leasehold surrender interest"--or, as the

parties call it, LSI--is "equal to the initial value (construction

cost of the capital improvement), increased (or decreased)" by

a percentage measured by the Consumer Price Index, less

depreciation. 16 U.S.C. s 5954(a)(3). If the expiring conces-

sion contract is renewed, the concessioner's LSI carries over.

16 U.S.C. s 5954(b).

The plaintiff-concessioners are unhappy with the Park Ser-

vice's regulations implementing these and other LSI provi-

sions of the 1998 Act. They say that " 'capital improvement'

is a well-recognized technical accounting term that all compa-

nies, as a matter of financial reporting, tax accounting, and

sound business practice use to distinguish upgrades to facili-

ties from ordinary 'repair and maintenance' costs." Brief for

Appellants at 41. For support they cite an affidavit from an

accountant submitted by Amfac in the district court. But the

district court refused to consider, in this facial challenge,

affidavits not submitted as part of the administrative record,

142 F. Supp. 2d at 73, and so shall we. Concessioners have

not attempted to show why affidavits outside the agency

record should be considered. See Steven Stark & Sarah

Wald, Setting No Records: The Failed Attempt to Limit the

Record in Review of Administrative Action, 36 Admin. L.

Rev. 333, 341-54 (1984). Still, we may acknowledge the

standard accounting definition of capital expenditure--an ex-

penditure that extends the useful life of the asset or increases

the asset's value, and is not repair and maintenance. Wheth-

er an expenditure fits within the first category and thus must

be depreciated or amortized, or the other category and thus

must be expensed, often calls for difficult, fact-intensive judg-

ments. See Glenn A. Welsch & Charles T. Zlatkovich,

Intermediate Accounting 443-46 (8th ed. 1989); Gary L.

Schugart, et al., Survey of Accounting 197-212 (6th ed. 1988);

Glenn A. Welsch & Daniel G. Short, Fundamentals of

Financial Accounting 448-49 (5th ed. 1987). As to tax

accounting, which the concessioners invoke without any cita-

tion to the law, we think this is entirely beside the point. The

tax code states that no deduction shall be allowed for "[a]ny

amount paid out for new buildings or for permanent improve-

ments or betterments made to increase the value of any

property or estate." 26 U.S.C. s 263. In practice, there is a

decided tilt to capitalizing many items because deductions

are, as the Supreme Court put it in INDOPCO, Inc. v.

Commissioner, 503 U.S. 79, 84 (1992), "strictly construed."

That rule of interpretation, of course, has no bearing on

whether a particular expenditure by a concessioner should be

treated as an addition to its LSI. Besides, we do not

understand what the concessioners see as the problem here.

The regulation of the Park Service repeats, word for word,

the statute's definition of "capital improvement." Compare

16 U.S.C. s 5954(e) with 36 C.F.R. s 51.51. To the extent

the concessioners are claiming that it was incumbent upon the

Park Service to add a gloss to the statutory definition, a gloss

drawn from accounting standards, they are mistaken, as the

district court held. See 142 F. Supp. 2d at 83. While

agencies may have leeway in interpreting the statutes they

administer, there is no rule of law compelling them to embell-

ish what Congress has enacted.

The concessioners also complain about s 51.67 of the regu-

lations, 36 C.F.R. s 51.67, and the "Repair and Maintenance

Reserve" in the Park Service's "Standard Concession Con-

tract," 65 Fed. Reg. at 26,069. Section 51.67 provides that

concessioners do not earn LSI "for repair and maintenance of

real property improvements unless a repair and maintenance

project is a major rehabilitation." "Major rehabilitation" is

defined in 36 C.F.R. s 51.51 as a pre-approved "comprehen-

sive rehabilitation" project the "construction cost of which

exceeds fifty percent of the pre-rehabilitation value of the

structure." (The phrase "repair and maintenance" is not

defined, in the regulations or in the 1998 Act.) The Standard

Concession Contract requires concessioners to establish a

reserve fund for repairs and maintenance projects, which

"may include repair or replacement of foundations, building

frames, window frames, sheathing, subfloors, drainage, reha-

bilitation of building systems such as electrical, plumbing,

built-in heating and air conditioning, roof replacement and

similar projects." 65 Fed. Reg. at 26,069.

The concessioners object that s 51.67 allows LSI only for

"projects costing more than 50% of a structure's replacement

costs...." 36 C.F.R. s 51.67. What types of "projects" they

do not say. If the project is a "capital improvement" it is

added to the LSI no matter what the cost of construction.

See 142 F. Supp. 2d at 83. If the project is for repair and

maintenance it does not qualify, as even the concessioners

agree. The 50% regulation--s 51.67--deals with the question

whether an outlay that would otherwise be considered an

expenditure for repair and maintenance should constitute a

capital improvement because, for instance, the repairs are so

extensive. How a particular project should be classified will

depend greatly on the particular facts, as it does even in tax

cases. See INDOPCO, Inc., 503 U.S. at 86. Nonetheless, the

parties quarrel about hypothetical projects. The Park Ser-

vice says that if a concessioner replaced a damaged dry wall

or a rotted beam in a building these would not qualify as

capital improvements and thus would not be included in the

concessioner's LSI. Brief for Appellees at 36; 65 Fed. Reg.

at 20,656. The concessioners argue that the cost of replacing

a hotel's brick fireplace would be included. 142 F. Supp. 2d

at 83. Replacement of a foundation, according to the conces-

sioners, also would clearly be a capital improvement; accord-

ing to the Park Service it would not qualify because a

foundation is "merely a component of a structure," rather

than a "structure, fixture or nonremoveable equipment."

Compare Brief for Appellants at 44 with Brief for Appellees

at 39. This last dispute arises because the repair and mainte-

nance reserve clause in the standard contract mentions foun-

dations. But all the clause says is that repair and mainte-

nance "may" include repair or replacement of foundations.

65 Fed. Reg. at 26,069.

The district court, after considering these arguments and

others, thought it could not give a definitive answer to the

issues thus posed. Echoing Reno v. Flores, 507 U.S. at 301,

and NCIR, 502 U.S. at 188, without citing the cases, the court

ruled as follows: "the Court cannot say that the regulation,

on its face, will be unlawful in its every application. Thus,

this challenge to the regulation must fail." 142 F. Supp. 2d at

85. The court was referring only to the concessioners' attack

on the "Repair and Maintenance Reserve" clause but we

think its reasoning applies equally to the 50% rule in s 51.67.

It is entirely possible that a project calling for repairs to a

roof, the replacement of floor boards, the renovation of wiring

and plumbing, and so forth would not ordinarily qualify as a

"capital improvement." Yet if the total cost of the repair

project exceeded 50% of the pre-repair value of the structure

it would be added to the LSI. See 36 C.F.R. ss 51.51, 51.67.

In that circumstance a concessioner would have no cause for

complaint. On the other hand, if the rehabilitation project

satisfied the statutory and regulatory definition of a "capital

improvement" it would be unlawful for the Park Service to

invoke s 51.67 and refuse to treat the expenditure as an

addition to the concessioner's LSI. We do not suggest that

the Park Service would do anything of the sort. See 65 Fed.

Reg. at 20,656-57. Our point is that on the face of the

regulations, the most we can imagine is that in some applica-

tions--depending on how the Park Service administers the

LSI regulations--there may be a conflict with the statute.

That is not a sufficient basis for holding the regulations

unlawful on their face, for the reasons given in part I.B. of

this opinion.

B.

The concessioners have two other problems with the LSI

regulations. The first relates to 16 U.S.C. s 5954(a)(3) and

the valuation of LSI: each concessioner's "leasehold surren-

der interest is equal to the initial value (construction cost of

the capital improvement), increased (or decreased)" by a

percentage measured by the Consumer Price Index, less

depreciation. The implementing regulation, 36 C.F.R.

s 51.51, defines "construction cost" as "the total of the in-

curred eligible direct and indirect costs necessary for con-

structing or installing the capital improvement...." "Eligi-

ble direct and indirect costs" are costs "in amounts no higher

than those prevailing in the locality of the project," id. It is

this "locality" limitation to which the concessioners object.

Projects in national parks, they tell us, are almost always

more expensive to construct than "similar private projects in

nearby localities, and Congress could not reasonably have

intended that concessioners swallow such costs without LSI

credit," a point the Park Service does not dispute. Brief for

Appellants at 47-48. But as the Park Service points out, the

concessioners' argument assumes that "locality" means out-

side the national park. The regulations do not so state and

we see no basis for indulging in that assumption. It may be

that the Park Service's particular interpretation regarding a

particular project in a particular national park could unrea-

sonably limit the valuation of a concessioner's LSI. But that

is no reason to hold that the regulation conflicts with the

statute or that it is arbitrary. If a concessioner has its own

construction company, as some apparently do, nothing in the

1998 Act requires the Park Service to accept whatever

amount the concessioner decides to charge itself for the

construction work. See 65 Fed. Reg. at 20,651. Like the

district court, we therefore sustain the regulation.

The concessioners' remaining problem with the LSI regula-

tions deals with 16 U.S.C. s 5954(a)(5): if the concessioner

"makes a capital improvement to an existing capital improve-

ment in which the concessioner has a leasehold surrender

interest, the cost of such additional capital improvement shall

be added to the then current value of the concessioner's

leasehold surrender interest." Their claim is that s 51.65 of

the regulations conflicts with this provision. The regulation

states:

A concessioner that replaces an existing fixture in which

the concessioner has a leasehold surrender interest with

a new fixture will increase its leasehold surrender inter-

est by the amount of the construction cost of the replace-

ment fixture less the construction cost of the replaced

fixture.

36 C.F.R. s 51.65. This regulation is unlawful, according to

the concessioners, because there is nothing in the statute

allowing subtractions from a concessioner's LSI. They also

believe the calculations required by the regulation would be

an administrative nuisance. In the Grand Canyon concession,

for instance, there are about 300 structures with many thou-

sands of fixtures.

The district court sustained the regulation for reasons

given by the Park Service, reasons we also find persuasive.

Without the regulation, concessioners would receive a windfall

every time they removed a fixture and replaced it with a new

one:

If a [concessioner] with a leasehold surrender interest in

the hotel were to replace the hotel furnace once every

five years for 15 years, the plaintiffs' proposed account-

ing would be to increase the leasehold surrender interest

three separate times by the cost of the furnace. Under

this approach, the [concessioner] would hold a leasehold

surrender interest equal to four furnaces, even though

the hotel would only contain one.

142 F. Supp. 2d at 88 n.16. As to the concessioners' textual

argument, it is true that the statute speaks only of additions

not subtractions. But under the regulation the calculation is

of net additions to LSI--the difference between the cost of

the new fixture and the discarded one. When concessioners

replace fixtures for a greater cost, their LSI will increase.

The regulation deals with how much the increase should be.

The statute, which speaks in terms of additions not replace-

ments, does not address that subject. We therefore reject

the concessioners' argument that s 51.65 of the regulations is

inconsistent with 16 U.S.C. s 5954(a)(5). We reject as well

their argument that the regulation is unreasonable. The

Park Service's policy of avoiding the windfalls that would

result without the regulation is reason enough to sustain

s 51.65, despite the administrative burdens it may generate.

III.

The concessioners claim the Park Service wrongly excluded

concessions contracts from coverage under the Contract Dis-

putes Act, 41 U.S.C. 601 et seq. See 36 C.F.R. s 51.3; 65

Fed. Reg. at 20,635.

Enacted in 1978, the Contract Disputes Act provides an

alternative forum for government contract disputes. Rather

than seeking judicial relief in the Court of Federal Claims, a

contractor may appeal decisions by a contracting official to an

administrative board within that agency. 41 U.S.C. s 607.

The board's decision may be appealed to the U.S. Court of

Appeals for the Federal Circuit. 41 U.S.C. s 607(g).

Section 51.3 of the regulations states that concession con-

tracts are not "contracts" within the meaning of the Contract

Disputes Act. 36 C.F.R. s 51.3 (2000). With this we agree.

The Act applies to any "express or implied contract" for the

"procurement" of "property," "services" or "construction."

41 U.S.C. s 602(a)(2). A procurement contract, the Park

Service reasoned, "is a contract for which the government

bargains for, and pays for, and receives goods and services."

65 Fed. Reg. at 20,635. Concession contracts are not of that

sort. Their function is not to procure services or goods for

the government. Instead, as the Park Service put it, conces-

sion contracts "authorize third parties to provide services to

park area visitors." Id. While the Park Service does not

administer the Contract Disputes Act, and thus may not have

interpretative authority over its provisions, its reasoning finds

support not only in the terms of that statute but also in the

National Parks Omnibus Management Act of 1998, under

which the Park Service may enter into concession contracts

"to authorize a person, corporation or other entity to provide

accommodations, facilities and services to visitors to" national

parks. 16 U.S.C. s 5952. The Committee reports accompa-

nying the 1998 Act also concluded that concession "contracts

do not constitute contracts for the procurement of goods and

services for the benefit of the government or otherwise,"

S. Rep. No. 105-202, at 39 (1998); H.R. Rep. No. 105-767, at

43 (1998), a position the Park Service had reached earlier

with respect to concession contracts under the 1965 Act. See,

e.g., Concessions Contracts and Permits, 57 Fed. Reg. 40,496,

at 40,498 (Sept. 3, 1992) (reiterating that the Park Service

"has never considered [concessions contracts] a type of feder-

al procurement contract"). The Court of Federal Claims,

considering the nature of concession contracts, also concluded

that "this arrangement does not constitute a procurement,

but is a grant of a permit to operate a business." YRT Servs.

Corp. v. United States, 28 Fed. Cl. 366, 392 n.23 (1993). The

decision rested, in part, on the fact that "the government is

not committing to pay out government funds or incur any

monetary liability." Id.

As against this analysis, the concessioners cite several

decisions of the Interior Department Board of Contract Ap-

peals [IBCA], a body created by Interior Department regula-

tions, see 41 U.S.C. s 607(a); 43 C.F.R. s 4.100 et seq. (2000).

The IBCA has held that the Contract Disputes Act applies to

concession contracts. See, e.g., Appeal of Watch Hill Conces-

sion, Inc., IBCA No. 4284-2000, 2001 WL 170911 (2001);

Appeal of Nat'l Park Concessions, Inc., IBCA No. 2995, 1994

WL 462401 (1994). But the decisions of this body "on any

question of law shall not be final or conclusive." 41 U.S.C.

s 609(b). And the IBCA's rationale for determining that

concession contracts are procurement contracts is flawed. In

its first opinion to consider the issue, the IBCA acknowledged

that the Contract Disputes Act does not cover all contracts

but then assumed that the Act does apply unless coverage is

explicitly foreclosed. See Appeal of R & R Enters., IBCA

No. 2417, 1989 WL 27790, at 24-25 (Mar. 24, 1989). Nothing

in the Act suggests such a sweeping presumption. Another

IBCA opinion states that if any "benefit" can be traced to the

government, then the Contract Disputes Act must apply.

Appeal of Nat'l Park Concessions, Inc., IBCA No. 2995, 1994

WL 462401, at 14 (Aug. 18, 1994). The primary purpose of

concessions contracts is to permit visitors to enjoy national

parks in a manner consistent with preservation of the parks.

16 U.S.C. s 5951. That the government receives monetary

compensation or incidental benefits from the concessioners'

performance is not enough to sweep these contracts into the

ambit of the Contract Disputes Act.

IV.

The concessioners' last complaint deals with the portion of

the new regulations designed to deal with transactions involv-

ing corporate concessioners (see 65 Fed. Reg. at 20,661). One

of the regulations states:

The concessioner may not assign, sell, convey, grant,

contract for, or otherwise transfer (such transactions

collectively referred to as "assignments" for purposes of

this part), without the prior written approval of the

Director, any of the following:

(a) Any concession contract;

...

(c) Any controlling interest in a concessioner or con-

cession contract;

...

36 C.F.R. s 51.85(a) & (c). A similar regulation prohibits,

without prior approval, any "encumbrance" of a "controlling

interest in a concessioner." 36 C.F.R. s 51.86(c). In the

concessioners' view, the regulations extend beyond the stat-

ute. The 1998 Act forbids any "concessions contract "from

being "transferred, assigned, sold, or otherwise conveyed or

pledged by a concessioner" without government approval. 16

U.S.C. s 5957(a). Approval must be given unless "the entity

seeking to acquire a concessions contract is not qualified" or

the transfer or conveyance would otherwise adversely affect

performance of the contract in a manner specified in 16

U.S.C. s 5957(b). The crucial difference between the regula-

tions and the statute, the concessioners say, is that the

regulations require approval of transactions dealing not only

with the transfers or assignments of concession contracts but

also with changes in control of the concessioner. The Park

Service responds that its change-of-control rule ensures that

unqualified persons do not wind up holding concession con-

tracts. Unlike individuals, a corporation can in effect trans-

fer a concession contract by selling its stock to another entity.

65 Fed. Reg. at 20,661. As the Park Service sees it, the

regulations are a permissible construction of the statutory

phrase "otherwise conveyed or pledged," an argument with

which the district court agreed. 142 F. Supp. 2d at 90-91.

How the Park Service regulations will operate does not

exactly leap from the pages of the Federal Register. It is

easy enough to see that if X corporation wanted to sell all its

assets, including its concession contract, it would first have to

get approval of the Director of the Park Service. No one

doubts that the regulation properly requires as much. The

Park Service also believes that if the non-public X corporation

structured the transaction as a sale of 100% of its stock

instead of an asset sale, there would be no functional differ-

ence as far as the concession contract is concerned. See

Alarm Indus. Communications Comm. v. FCC, 131 F.3d

1066, 1070-71 (D.C. Cir. 1997). It is only a short leap to the

conclusion that if, rather than a sale of 100% of the stock, X

corporation sold some lesser amount representing a control-

ling interest, this too should require prior approval. The

regulations define controlling interest in much the same

manner as the Securities and Exchange Commission, see, e.g.,

17 C.F.R. s 210.1-02(g), that is, not in terms of any particular

percentage of outstanding voting stock. Rather, a "control-

ling interest" in a corporate concessioner constitutes "suffi-

cient outstanding voting securities" of "the concessioner or

related entities that permits the exercise of managerial au-

thority" over the concessioner. 36 C.F.R. s 51.84.

Beyond these simple examples we enter a vale of ambigui-

ty. Transactions of the sort just described are not the focus

of the concessioners' concern. Their problem is that the

regulations--as they read them--require Park Service ap-

proval of transactions undertaken by the concessioners'

"shareholders or their affiliates." Brief for Appellants at 55.

But do they? The shareholders of incorporated concessioners

are typically not individuals but parent corporations. The

Park Service reports that "many" of its concessioners "are

corporations that hold a concession contract as their exclusive

business activity" and that almost all of the largest conces-

sioners are "wholly owned subsidiaries of larger corpora-

tions." 65 Fed. Reg. at 20,661. One of the plaintiffs here,

ARAMARK Sports and Entertainment Services, Inc., is a

wholly-owned subsidiary of ARAMARK/HMS Company,

which is a wholly-owned subsidiary of ARAMARK Sports and

Entertainment Group, Inc., which is a wholly-owned subsid-

iary of ARAMARK Corporation, which is listed on the New

York Stock Exchange. Brief for Appellants at iv.

Wholly-owned means, in the case of incorporated subsidiar-

ies, that the parent corporation holds all of the subsidiary

corporation's stock. What worries the concessioners is that

transactions by the parent could potentially require Park

Service approval if a change in control would result. But the

regulations do not read that way. The critical provision is 36

C.F.R. s 51.8. It speaks only of sales, assignments, convey-

ances and so forth by the "concessioner." The term "conces-

sioner," in regulatory parlance, "is an individual, corporation,

or other legally recognized entity that duly holds a concession

contract," 36 C.F.R. s 51.3--a definition that at least on its

face encompasses only the subsidiary corporation, not the

parent. It therefore appears that if the parent corporation

engages in a sale-of-control transaction, this would not re-

quire approval because the concessioner--the subsidiary cor-

poration--would not be doing the selling. The attorneys for

the Park Service say, in their brief, that the regulations do

indeed cover transactions by the corporate concessioner's

parent company. Brief for Appellees at 53-54. But they do

not parse the language of the regulations, and they point to

nothing in the Park Service's explanation of its regulations

that goes so far. In fact, the Park Service justified its

regulations on the basis that it would be "anomalous" if a

"corporate concessioner" could sell "its stock to a new party

(sale of a controlling interest)" without having to seek Park

Service approval. 65 Fed. Reg. at 20,661. If, despite the

language of the regulations, transactions at the parent level

are also supposed to be covered, we are far from certain how

the Park Service intends to implement its rules. An investor

might begin purchasing stock of the parent corporation of a

corporate-concessioner on the open market. Must the con-

cessioner corporation go to the Park Service and ask for

approval of the outsider's purchases of the parent when the

outsider's percentage of the outstanding shares reaches some

magic number? That makes no sense. Neither the conces-

sioner corporation nor the parent corporation has any control

over the purchaser. Perhaps this is why the regulation

seems to speak only in terms of the concessioner selling its

stock. If the regulations do not cover the transaction just

mentioned, but do cover a sale of control by a parent corpora-

tion, the Park Service would have to justify a rule that allows

an outsider, a complete stranger, to gain a "controlling inter-

est" through open market purchases but requires approval

before the parent makes a block sale to the same person.

Control of the parent, and thus of the subsidiary concession-

er, would transfer in both situations, and under the Park

Service's theory, so would the concession contract, yet the one

transaction would be regulated and the other not.

The short of the matter is that we do not know whether the

problems the concessioners identify exist. We cannot be sure

that the Park Service will apply its sale-of-control regulations

to transactions involving only sales of stock by corporate

concessioners (as distinguished from open market sales by

shareholders or sales by a parent company of its stock). The

questions thus raised, and the other questions posed by the

many possible forms of corporate restructuring (see, e.g., 1

Martin D. Ginsburg & Jack S. Levin, Mergers, Acquisitions,

and Buyouts p 105 (2001)), present "too many imponderables"

to permit judicial review at this time. Clean Air Implemen-

tation Project v. EPA, 150 F.3d at 1200. This aspect of the

case, in other words, is not ripe. See Media Access Project v.

FCC, 883 F.2d 1063, 1070 (D.C. Cir. 1989). The "classic

institutional reason" for postponing review is the "need to

wait for a 'rule to be applied [to see] what its effect will be,' "

Louisiana Envtl. Action Network v. Browner, 87 F.3d 1379,

1385 (D.C. Cir. 1996) (quoting Diamond Shamrock Corp. v.

Costle, 580 F.2d 670, 674 (D.C. Cir. 1978)). The issues here

can be presented in a more "concrete" setting. Abbott Labs.

v. Gardner, 387 U.S. 136, 148 (1967); Ass'n of Am. R.R., 146

F.3d 942, 946 (D.C. Cir. 1998). The regulations state that

"[a]ssignments" without the prior approval of the Park Ser-

vice will be considered "null and void" and will be viewed as a

"material breach of the applicable concession contract which

may result in termination of the contract for cause." 36

C.F.R. s 51.88. Whether this means the Park Service will

deem transfers of controlling interests in a concessioner's

parent as "null and void" is not at all clear. But the prospect

certainly can give rise to an interested party's seeking the

Park Service's judgment that its proposed transaction does

not need approval. A lawsuit could be brought if the conces-

sioner is dissatisfied with the answer. Then at least the court

would have some idea of what the Park Service thinks its

regulations cover. Then too the validity of the regulations, as

thus interpreted, could be determined in light of the language

of the statute, which speaks only of transfers of concession

contracts.

The possible hardship to the concessioners in waiting does

not alter our conclusion that the issues are not ripe. No

concessioner has indicated that a transfer of control is immi-

nent. We therefore have no reason to believe that in the

immediate future they will have to alter their conduct to their

disadvantage. Contrast Abbott Labs., 387 U.S. at 152. It

may be that matters cannot be sorted out without further

litigation but that is not the sort of hardship we recognize in

evaluating whether a case is ripe for review. See, e.g., Clean

Air Implementation Project, 150 F.3d at 1206.

Our conclusion that this aspect of the case is not ripe

differs from that of the district court, which ruled against the

concessioners' claim on its merits. We therefore vacate the

district court's judgment in this respect.

* * *

The judgment of the district court is affirmed in part,

reversed in part and vacated in part. The case is remanded

for further proceedings, consistent with this opinion, on Am-

fac's as-applied challenge to regulations concerning the pref-

erential right of renewal.

So ordered.