Opposition Brief — National Park Hospitality Association v. Department of the Interior

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No. 02-196

In the Supreme Court of the Tnitey' States

NATIONAL PARK HOSPITALITY ASSOCIATION,

PETITIONER

UNITED STATES DEPARTMENT OF THE INTERIOR,

ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENT

IN OPPOSITION

THEODORE B. OLSON

Solicitor General

Counsel of Record

ROBERT D. MCCALLUM, JR.

Assistant Attorney General

BARBARA C. BIDDLE

MARY K. DOYLE

Attorneys

Department of Justice

Washington, D.C. 20530-0001

(202) 514-2217

QUESTION PRESENTED

Whether a National Park Service regulation that

states that National Park Service concession agree-

ments are not contracts within the meaning of the

Contract Disputes Act of 1978, 41 U.S.C. 601 et seq., is

valid.

(I)

TABLE OF CONTENTS

Opinions below ...........sesessesssseeneensensenssnenesseenessesnssnsenennennennene:

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TABLE OF AUTHORITIES

Cases:

Bonneville Assocs. v. United States, 43 F.3d 649

Caldwell & Santmyer, Inc. v. Glickman, 55 F.3d

eye————————————————

Canadian Aviator, Ltd. v. United States, 324 US.

LS Sn

Chevron U.S.A., Inc. v. Natural Res. Def. Council,

Inc., 467 U.S. 837 (1984)

eeeeeee

Coastal Corp. v. United States, 713 F.2d 728

(Feed. Cir. 1988) .......c.ccsceressersssessenssersenensessessecasessnsssensensens

G.E. Boggs & Assocs., Inc. v. Roskens, 969 F.2d

* BOBB Cee. Cle. IBGE) nnccecececcccsesesesccscscccsesscscscsssesssenssnsnes

Grunley Constr. Co., 99-1 B.C.A. (CCH) 4 30,138

J.E.M. AG Supply, Inc. v. Pioneer Hi-Bred Int'l,

Ince., 122 S. Ct. 598 (2001) .....cccceceereee

Libra Eng’g Inc., NASA BCA No. 1182-17, 1984

WL 13526 (July 13, 1984) ............ssssssesvssenesesnenereenennennees

Lorillard v. Pons, 434 U.S. 575 (1978)

National Park Concessions, Inc., 94-3 B.C.A. (CCH)

q 27,104 (1994)

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New Era Constr. v. United States, 890 F.2d 1152

Oroville-Tonasket Irrigation Dist. v. United States,

33 Fed. Cl. 14 (Fed. Cl. 1995) .........cccccccceseseesenes

(IIT)

10, 11

Cases—Continued: Page

Pacrim Pizza Co. v. Pirie, No. 00-1534, 2002 WL

31103521 (Fed. Cir. Sept. 23, 2002) ...........-ccsensnsrereneneennees 11

Pasteur v. United States, 814 F.2d 624 (Fed. Cir.

1QBT) ....ecceccocececsccsereesesessesersvsessoscossssnssssssssonsonsonsssssososassssnsseseess 14

Pound v. United States, No. 94-496C (Fed. Cl.

Aug. 30, 1996) .......ceccecsesnssesnesnsssensensnsensnnsnssnennsnensnennensansnennens 15

R & R Enters., 89-2 B.C.A. (CCH) 4 21,708 (1989) ........... 14

Schickler v. Davis, 10 Fed. Appx. 944 (Fed.

Cir.), cert. denied, 122 S. Ct. 277 (2001) ......-.--ecvesseneensnsneees 9

Total Med. Mgmt., Inc. v. United States, 104 F.3d

1314 (Fed. Cir.), cert. denied, 522 U.S. 857 (1997) .......... 6-7

United States v. Rodgers, 466 U.S. 475 (1984) .......--0-0--++ 13

YRT Servs. Corp. v. United States, 28 Fed. Cl.

366 (Fed. Cl. 1993) ...... . _ 4,5, 10, 11

Yosemite Park & Curry Co. v. United States, 582

F.2d 552 (Ct. Cl. 1978) ........ccecscersrsrersrerersneneeseenesesenssensssssenss 7,8,9

Constitution, statutes and regulations:

U.S. Const. Art. III 14

Act of Oct. 9, 1962, Pub. L. No. 87-762, 76 Stat. 761 ........... 8

Act of Aug. 21, 2002, Pub. L. No. 107-217, § 3(e)(2),

116 Stat. 1299 (to be codified at 40 U.S.C. 3142) .............. ll

Contract Disputes Act of 1978, 41 U.S.C. 601

CE BOG. -..ncececeseceeeersernenenensnnnsnsnenensnansnsnsnensnnnsnsnnnssnensnenanenanenenenenes 3

AD U.S.C. GO02(a) ..........ceccenerenenees ) 10

41 U.S.C. COBID) ..2.ecccccecesesessesscscsccscscscsssssnssenssesenenenssesssnenes 6,14

Davis-Bacon Act, 40 U.S.C. 276ala) ........-sseresesneernnnennseees 11

Dependents’ Medical Care Act, ch. 374, 70 Stat. 250

(10 U.S.C. 1071-1106) ‘ 8

10 U.S.C. 1076(a)(1) 8

Little Tucker Act:

28 U.S.C. 1346 16

28 U.S.C. 1346(a)(2) 11

Statutes and regulations—Continued:

National Park System Concessions Policy Act, 16

UE Cod FF ee

16 U.S.C. 20d (1964 & Supp. I] 1967)...

National Parks Omnibus Management Act of 1998,

16 U.S.C. 5901 et seq.:

16 U.S.C. 5OG1-GOGG ...........0.0.cecscsererersersreereresssossssesees

16 U.S.C. SRG I(D) .220.0000-c02ccececsccsesessesecsccsssecsesesssssnosess

- 16 U.S.C. 5951(b)(1)

1) (et

16 U.S.C. SOGAa1) .....0000...recevsvcerenserersneereersesessrerseres

16 U.S.C. SOGA(aNS) ...........0.c.ccersrrererersererserersererensersses

16 U.S.C. GOGADMZ) ...22...0.cececscsersssererseserscesrsnsnsssssseses

UC 9)

16 U.B.C. GRGBID) 22220cccccecevececceescsccscscsccscessecsessnscsenenscees

Reclamation Authorizations Act of 1976, Pub. L.

No. 94-423, § 201, 90 Stat. 1325 .........ccccccccecerenenseeenernes

Service Contract Act of 1965, 41 U.S.C. 351 et seq. ......

Tucker Act:

BB UBC. 24DI .nceccccccecerscscsececscscsecscscssosnscssnssesnonesssnscssososes

2B U.S.C. 1491 a1) ...20.0.00.0.ccecrcenserereveererensensesenserssssssssnes

2B U.S.C. 1491(D) ..........ccncersvresersseererensnsersesersersrsesssscsssones

LUE Cok

1B UBC. ROI .2ccccccncecceeosesececscsesscscsesevssssssossssnesssnssssssossssesess

36 C.F.R.:

ESN |

BSoction B.D (1GBB) .....cccocccecccesecsecccccsessscnsescssccsesssssssossssoes

Miscellaneous:

57 Fed. Reg. (1992):

PD. 40,496 .......nececcesssssesseeneenesnsensensenssnennsansnssnssnssnsnnsnesnennesness

PD. 40,508 ........cceccsssvssnsesseneeneesseensensennennsenssnssnsensenssnennssneenenss

65 Fed. Reg. (2000):

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‘SoS

Miscellaneous—Continued:

pp. 26,052-26,085

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In the Supreme Court of the Anited States

No. 02-196

NATIONAL PARK HOSPITALITY ASSOCIATION,

PETITIONER

vz.

UNITED STATES DEPARTMENT OF THE INTERIOR,

ET AL.

ON PETITION FOR A WRIT OF CERTIORARI

TO THE UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

BRIEF FOR THE FEDERAL RESPONDENT

IN OPPOSITION

OPINIONS BELOW.

The opinion of the court of appeals (Pet. App. la-34a)

is reported at 282 F.3d 818. The opinion of the district

court (Pet. App. 35a-92a) is reported at 142 F. Supp. 2d

54.

JURISDICTION

The judgment of the court of appeals was entered on

March 1, 2002. A petition for rehearing was denied on

May 8, 2002 (Pet. App. 93a-94a). The petition for a writ

of certiorari was filed on August 6, 2002. The

(1)

jurisdiction of this Court is invoked under 28 U.S.C.

1254(1).

STATEMENT

1. Congress created the National Park Service

(NPS) to oversee our national parks and “to conserve

the scenery and the natural and historic objects and the

wild life therein and to provide for the enjoyment of the

same in such manner and by such means as will leave

them unimpaired for the enjoyment of future genera-

tions.” 16 U.S.C. 1; Pet. App. 49a. In furtherance of

those goals, the NPS has permitted private, for-profit

concessioners, like those represented by petitioner, to

provide visitors with “lodging, food, merchandising,

transportation, outfitting and guiding, and similar

activities.” 65 Fed. Reg. 20,630 (2000); Pet. App. 49a.

Concessioners operate their businesses in national

parks pursuant to certain concession agreements

reached with the NPS. For many years, those con-

cession agreements were governed only by NPS

internal regulations and policies. Pet. App. 2a. In 1965,

Congress enacted the National Park System Con-

cessions Policy Act (1965 Act), 16 U.S.C. 20 et seq.,

which codified many of the NPS’s longstanding con-

cessions policies. Pet. App. 4a. Under the 1965 Act, a

concessioner paid the governnient a franchise fee—

generally a percentage of gross revenue—in exchange

for the privilege of operating its business in a national

park. Ibid. Critically, for purposes of this litigation,

the 1965 Act also gave concessioners, at the time of the

expiration of their concession agreements, a right of

preference of renewal, which amounted, basically, to a

right of first refusal. 16 U.S.C. 20d (1964 & Supp. II

1967).

In 1992, following a review of national park con-

cessions, the Department of the Interior concluded that

the right of preference in renewal enjoyed by incum-

bent concessioners had significantly impeded the com-

petition for concession contracts. See 57 Fed. Reg.

40,508 (1992). Eventually, Congress stepped in,

enacting the National Parks Omnibus Management Act

of 1998 (1998 Act), 16 U.S.C. 5951-5966, which elimi-

nated the preferential right of renewal and enacted

other rules governing concession contracts. In 2000,

the NPS, implementing the 1998 Act, issued new regu-

lations that established the new concession contract

process. 65 Fed. Reg. at 20,630-20,631. Among other

things, the regulations provided that “[cloncession

contracts are not contracts within the meaning of the

Contract Disputes Act of 1978 (CDA), 41 U.S.C. 601 et

seq., and are not service or procurement contracts

within the meaning of statutes, regulations or policies

that apply only to federal service contracts or other

types of federal procurement actions.” 36 C.F.R. 51.3.

That regulation was supplemented by publication of a

“Standard Concession Contract” in the Federal Regis-

ter, which incorporated the changed terms. See 65 Fed.

Reg. at 26,052-26,085.

2. Petitioner, an association of concessioners,

brought suit in district court, alleging, inter alia, that

the NPS regulation is contrary to the Contract Dis-

putes Act of 1978, 41 U.S.C. 601 et seg. The district

court rejected that argument. Pet. App. 67a. The

district court found that the CDA is ambiguous with

respect to whether concession contracts are pro-

curement contracts for the purposes of the CDA. /d. at

68a. Applying Chevron deference, Chevron U.S.A., Inc.

v. Natural Resources Defense Council, Inc., 467 U.S.

837, 841 (1984), the district court upheld the NPS

regulation as a reasonable interpretation of the CDA.

Pet. App. 69a. The court recognized that “the basic

nature of concession contracts differs markedly from

that of typical procurement contracts” in several

respects. Jd. at 68a. In concession agreements, the

government is not attempting to procure chattel or

services for itself; instead, it is permitting another to

use its land as in a lessor/lessee relationship. /bid.

Furthermore, when the government procures some-

thing, it usually acts as payor, not payee as in the case

of a concession contract. /d. at 68a-69a.

Turning to the legislative history of the 1998 Act, the

court found that Congress had categorized concession

contracts “as authorization contracts, not procurement

contracts.” Pet. App. 69a (citing 16 U.S.C. 5952).

Further, the court noted that when Congress defined

concession contracts as such in 1998, “the prevailing

understanding was that concession contracts were not

procurement contracts.” Jbid. The court based that

conclusion on the fact that NPS regulations imple-

menting the 1965 Act had expressly stated that con-

cession contracts were not “Federal procurement

contracts,” and on the holding of YRT Services Corp. v.

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

that “concession contracts ‘did not constitute a procure-

ment,’” because the NPS was not paying funds, but was

collecting fees in exchange for granting a permit to

operate a concession business. Pet. App. 69a. The

district court concluded that Congress was presumed to

have known about and therefore to have adopted that

view when it enacted the 1998 Act without foreclosing

that interpretation. Jd. at 69a-70a (citing Lorillard v.

Pons, 434 U.S. 575, 580 (1978)). Thus, Congress, in the

1998 Act, had ratified the then-prevailing view that

concession contracts were not procurement contracts.

Id. at 70a.

The court acknowledged petitioner’s citations to de-

cisions of certain administrative tribunals that reached

contrary conclusions, but concluded that most of the

cases pre-dated Congress’s ratification of the view that

concession contracts are not procurement contracts.

Pet. App. 70a. As for the one administrative decision

issued after the 1998 Act, the court noted that it was

not bound by that tribunal’s determination. /bid.

3. The court of appeals affirmed the district court’s

ruling concerning the validity of the NPS regulation,

concluding that NPS concession contracts are not

procurement contracts within the meaning of the CDA.

The court of appeals acknowledged that the district

court may have decided the case on an incorrect

ground, noting “the Park Service does not administer

the Contract Disputes Act, and thus may not have

interpretive authority over its provisions.” Pet. App.

27a. However, it concluded that the NPS’s regulatory

determination that concession contracts are outside the

ambit of the CDA is supported by the clear language of

both the CDA and the 1998 Act. Jbid.

Noting that a procurement contract is one in which

“the government bargains for, and pays for, and re-

ceives goods and services,” the court of appeals con-

cluded that “(cJoncession contracts are not of that sort.”

Pet. App. 27a (quoting 65 Fed. Reg. at 20,635). Rather,

under the 1998 Act, NPS was empowered to enter into

concession contracts “‘to authorize a person, corpora-

tion, or other entity to provide accommodations, facili-

ties and services to’ visitors to national parks.” Ibid.

(quoting 16 U.S.C. 5952). The court found yet more

support for the NPS’s understanding of its concession

contracts in YRT Services Corp., 28 Fed. Cl. at 392 n.23,

which, examining concession contracts under a different

statutory regime, held that “this arrangement does not

constitute a procurement, but is a grant of a permit to

operate a business.” Pet. App. 28a.

Like the.district court, the court of appeals acknow-

ledged that the Interior Department Board of Contract

Appeals (IBCA) had reached the opposite conclusion.

However, the court also took note of that administra-

tive panel’s authorizing legislation, the CDA, which

stated that the decisions of the IBCA “on any question

of law shall not be final or conclusive.” 41 U.S.C. 609(b);

Pet. App. 28a. The court further found that the

“IBCA’s rationale for determining that concession con-

tracts are procurement contracts is flawed.” Ibid. It

noted that the -IBCA’s first decision on the issue

recognized that the CDA “does not cover all contracts

but then assumed that the Act does apply unless

coverage is explicitly foreclosed.” [bid. “Nothing in the

Act,” said the court of appeals, “suggests such a

sweeping presumption.” Jbid. In response to another

IBCA opinion which had held that the CDA must apply

if any benefit can be traced to the government, the

court reasoned that “(the fact] [tJhat 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.” Jd. at 29a.

ARGUMENT

The court of appeals’ decision is correct and does not

conflict with any decision of any other court of appeals

or, for that matter, any other federal court. Accord-

ingly, further review is not warranted.

1. Petitioner asserts that the decision below conflicts

with a decision of the Federal Circuit, Total Medical

—

Management, Inc. v. United States, 104 F.3d 1314, cert.

denied, 522 U.S. 857 (1997), and a decision of its pre-

decessor, the Court of Claims, Yosemite Park & Curry

Co. v. United States, 582 F.2d 552 (Ct. Cl. 1978).

Petitioner’s reliance on those cases is misplaced.

a. Total Medical Management concerned agree-

ments between the military and a private health care

company to provide health care to the dependents of

servicemen. As noted by petitioner, in holding that the

agreement at issue was a procurement contract subject

to the CDA, the Federal Circuit relied upon the fact

that the United States had “legal obligations to military

dependents” to provide health care. Pet. 17 (quoting

Total Med. Mgmt., 104 F.3d at 1320). Petitioner’s

claims notwithstanding, the NPS has no similar “legal

obligations” to park visitors.

Petitioner maintains that the NPS has a “statutory

duty to provide ‘accommodations, facilities and services

that * * * are necessary and appropriate for public

use and enjoyment’ of the national parks,” Pet. 9

(quoting 16 U.S.C. 5951(b)(1)). However, a cursory

view of the statutory provision cited by petitioner re-

veals that there is no such “statutory duty” on the NPS.

Section 5951(b), entitled “Policy”, states that, to the

extent that there is any development of “public accom-

modations, facilities, and services” within the national

parks, that development “shall be limited to those

accommodations, facilities and services that are * * *

necessary and appropriate for public use and enjoy-

ment” of the national park. 16 U.S.C. 5951(b)(1)

(emphasis added). Far from imposing a statutory man-

date for the provision of services to visitors, the statute

cited by petitioncr stands as a limitation on the pro-

vision of such services.' That limitation is quite dif-

ferent from the legal obligation of the military to pro-

vide health care in Total Medical Management. See

Dependents’ Medical Care Act, ch. 374, 70 Stat. 250

(codified at 10 U.S.C. 1071-1106); 10 U.S.C. 1076(a)(1)

(“A dependent * * * is entitled * * * to the medical

and dental care prescribed by section 1077 of this

title.”).

b. Yosemite Park & Curry Co. also presents no con-

flict with the decision below. While the plaintiff in that

case did have a concession agreement with the NPS,

see 582 F.2d at 554 (“they executed a concession con-

tract”), the contract at issue was not a concession

agreement. Rather, it was a simple contract for the

procurement of transportation services. “{P]laintiff

agreed to provide bus service to the public without

charge and defendant agreed to reimburse [plaintiff] for

its actual expenses plus a reasonable profit for pro-

' At most, NPS is required to protect and preserve the en-

vironment of the parks. 16 U.S.C. 1.

® Similarly, another case cited by petitioner (Pet. 18), Oroville-

Tonasket Irrigation District v. United States, 33 Fed. Cl. 14 (Fed.

Cl. 1995), yields no support for its argument. There, the agree-

ment between the Department of the Interior and the irrigation

district was not a concession agreement; it was a contract whereby

the Department of the Interior paid the irrigation district to

operate and maintain a unit of a dam project owned by the Depart-

ment of the Interior. Moreover, as in Total Medical Management,

the Department of the Interior was under a statutory mandate to

perform those tasks; Congress ordered the Department of the

Interior “to construct, operate, and maintain” that unit of the dam

project. See id. at 21 (“Acts of October 9, 1962 and September 28,

1976 authorized the Secretary of the Interior to construct, operate

and maintain the project unit in question to supply irrigation.”);

Reclamation Authorizations Act of 1976, Pub. L. No. 94-423, § 201,

90 Stat. 1325; Act of Oct. 9, 1962, Pub. L. No. 87-762, 76 Stat. 761.

viding this service.” /bid. That is a typical procure-

ment contract. Accordingly, the court held that the

NPS was not exempt from procurement regulations,

but was “bound by the procurement laws in the pur-

chase of services, be they transportation services or

some other variety, from a private contractor, whether

that contractor is otherwise a ‘concessioner’ or not.” /d.

at 559. Yosemite Park, therefore, stands for the pro-

position that the existence of a concession agreement

between the government and a party does not alter the

character of a separate ordinary procurement contract.

It does not suggest that a concessions contract is itself a

procurement contract or is otherwise indistinguishable

from a procurement contract, and indeed its premise is

to the contrary. In any event, as the concession agree-

ment in this case involves no payment by the govern-

ment for services, but rather the payment of fees by the

concessioner in exchange for a permit to operate of a

business, it is quite obviously distinguishable from

Yosemite Park.

2. The cdurt of appeals’ conclusion that the CDA

does not apply to NPS concession agreements was

correct. The CDA applies only to procurement con-

tracts, and the NPS’s concession contracts are not pro-

curement contracts.

a. It is axiomatic that the CDA is not applicable to

all government contracts. Schickler v. Davis, 10 Fed.

Appx. 944, 946 (Fed. Cir.) (per curiam), cert. denied, 122

S. Ct. 277 (2001); G.E. Boggs & Assocs., Inc. v.

Roskens, 969 F.2d 1023, 1026 (Fed. Cir. 1992); Coastal

Corp. v. United States, 713 F.2d 728, 730 (Fed. Cir.

1983). Contracts within the scope of the CDA are

limited to those “entered into by an executive agency

for—(1) the procurement of property, other than real

property in being; (2) the procurement of services; (3)

the procurement of construction, alteration, repair or

maintenance of real property; or, (4) the disposal of per-

sonal property.” 41 U.S.C. 602(a); see Coastal Corp.,

713 F.2d at 730 (“scope of the Act thus is limited to

express or implied contracts for the procurement of

services and property and for the disposal of personal

property”). For purposes of the CDA, a “procurement”

is “an acquisition by purchase, lease, or barter, of

property or services for the direct benefit or use of

the federal government.” Bonneville Assocs. v.

United States, 43 F.3d 649, 653 (Fed. Cir. 1994); see

New Era Constr. v. United States, 890 F.2d 1152, 1157

(Fed. Cir. 1989).

Thus, concession contracts like the NPS’s Standard

Form Concession Contract differ markedly from pro-

curement contracts in at least two respects. First,

“(uJnlike traditional government contracts, the govern-

ment does not make payments to the contractor.” YRT

Servs. Corp. v. United States, 28 Fed. Cl. 366, 371 (Fed.

Cl. 1993). Rather, “contractors, known as conces-

sioners, charge for services provided to the public, and,

in turn, pay NPS a fee for the right to operate a con-

cession business.” Jbid.’ Thus, in a concession contract,

“the government is not committing to pay out govern-

ment funds or incur any monetary liability.” Jd. at 392

n.23.‘ In this case, it is undisputed that NPS does not

3 Accordingly, the Court of Federal Claims concluded that a

NPS concession contract for lodging facilities issued pursuant to

the 1965 Concessions Policy Act was “unique from a standard gov-

ernment contract,” and was not subject to procurement contracts

laws. YRT Servs. Corp., 28 Fed. Cl. at 393.

4 Petitioner criticizes the court of appeals for quoting this

phrase because “CDA coverage explicitly does not depend on the

expenditure of appropriated funds.” Pet. 12 n.2 (citing 41 U.S.C.

602(a)). Petitioner’s criticism is off the mark. While the CDA does

make payments to concessioners under its concession

contracts.

Second, in a concession contract, the contractor pro-

vides a benefit directly to the public (or some other

third-party), whereas in a procurement contract, the

benefit is provided to the government. New Era

Constr., 890 F.2d at 1157 (contract was not a procure-

ment contract within meaning of CDA because contract

was not for benefit of the federal government). Here,

the services concessioners offer for sale benefit, first

and foremost, the concessions’ customers. As demon-

strated above (pp. 7-8, supra) the NPS has no statutory

duty to provide services to visitors. Thus, the only

benefits obtained by the government from the provision

of services by concessioners are those that emanate

from providing a more enjoyable stay for park visitors.

Such benefits are incidental in nature, flowing only

indeed extend to the contracts of “nonappropriated fund activities

described in [the Tucker Act]”—to wit, military exchanges, see 28

U.S.C. 1346(a)(2), 1491(aX(1); Pacrim Pizza Co. v. Pirie, No. 00-

1534, 2002 WL 31103521, at *1 (Fed. Cir. Sept. 23, 2002)—that

provision has nothing to do with this case. The NPS, unlike a

military exchange, is an appropriated fund instrumentality, and

thus the CDA applies to its procurement contracts. Thus, the

question is not whether “CDA coverage * * * depend{s] on the

expenditure of appropriated funds.” Pet. 12 n.2. Rather, the

relevant inquiry is whether an expenditure by the government is

required for there to be a procurement. The Federal Circuit, at

least, has answered in the affirmative. Bonneville Assocs., 43 F.3d

at 653; YRT Servs. Corp., 28 Fed. Cl. at 392 n.23. If the Service

Contract Act of 1965, 41 U.S.C. 351 et seq., and the Davis-Bacon

Act, 40 U.S.C. 276a(a) (repealed by Act of Aug. 21, 2002, Pub. L.

No. 107-217, § 3(e)(2), 116 Stat. 1299 (to be codified at 40 U.S.C.

3142)), do not apply to NPS concession agreements, it is not

because the NPS is a non-appropriated fund activity, but rather

because NPS concession contracts entail no expenditure by the

government that would trigger either statute.

indirectly to the government. The acquisition of such

incidental and intangible benefits cannot convert that

concession contract into a procurement contract.”

b. The court of appeals’ decision is also consistent

with the NPS’s longstanding regulatory position and

the legislative history of the 1998 Act. The NPS’s regu-

latory position that concession contracts are not pro-

curement contracts within the scope of the CDA is well-

established and long pre-dates the 1998 Act. E.g., 57

Fed. Reg. 40,496 (1992); 36 C.F.R. 51.1 (1993); 65 Fed.

Reg. 20,635 (2000) (preamble to the 2000 regulation).

Normally, Congress is presumed to be aware of an ad-

ministrative interpretation of a statute and to have

adopted that interpretation when, in enacting a new

statute, it incorporates portions of the prior law subject

to the administrative interpretation. See Lorillard v.

5 Petitioner's argument that the NPS, through its concession

contracts, procures “construction, alteration, repair or main-

tenance of real property” does not alter the analysis. Pet. 10. To

be sure, the United States has title to all real property constructed

by concessioners on NPS land. 16 U.S.C. 5954(d). However, con-

cessioners hold a leasehold surrender interest in any capital

improvement they make on NPS land, equal in value to the

construction cost, plus inflation, “less depreciation * * * as

evidenced by the condition and prospective serviceability in com-

parison with a new unit of like kind.” 16 U.S.C. 5954(a)(1) and (3).

To the extent that petitioner complains that normal upkeep and

maintenance costs are not added to the leasehold surrender value,

and, therefore, the NPS “procures” that benefit in a concession

contract, any benefit falls to the NPS only incidentally. The pri-

mary beneficiaries of the maintenance and upkeep of the con-

cession’s real property are the concessioner (as it minimizes the

depreciation of its leasehold surrender interest and allows for the

continued successful operation of its for-profit business) and the

concession’s customers (who may continue to have safe enjoyment

of the concession).

Pons, 434 U.S. 575, 580-581 (1978). The legislative

history confirms that Congress likewise distinguished

concession contracts from ordinary procurement con-

tracts. “The Committee considers that * * *

[concessions] contracts do not constitute contracts for

the procurement of goods and services for the benefit of

the government or otherwise.” S. Rep. No. 202, 105th

Cong., 2d Sess. 39 (1998). In light of that presumption

and legislative history, the textual reference to “con-

cessions contract” should be understood as distin-

guishing such contracts from procurement contracts.

See 16 U.S.C. 5952 (“the Secretary shall utilize conces-

sions contracts to authorize a person, corporation, or

other entity to provide accommodations, facilities, and

services to visitors to units of the National Park

System”).

Petitioner’s reliance on J.E.M. AG Supply, Inc. v.

Pioneer Hi-Bred International, Inc., 122 S. Ct. 593, 598

(2001) (utility patents for plants); United States v.

Rodgers, 466 U.S. 475, 480 (1984) (breadth of the term

“jurisdiction” in 18 U.S.C. 1001); and Canadian Avia-

tor, Ltd. v. United States, 324 U.S. 215, 222 (1945)

(scope of the Public Vessels Act), is also misplaced. .

These cases stand for the unremarkable proposition

that a court of appeals may not “add limiting language

to a statute that Congress intended to be broad and

comprehensive.” Pet. 12. However, in upholding the

NPS regulation, the court of appeals did not attempt to

add limiting language to the CDA, but rather faithfully

interpreted the language of the 1998 Act. Congress's

actions there spoke authoritatively as to its view as to

whether concession agreements are within the scope of

the CDA.

c. Petitioner asserts that the court of appeals’ de-

cision conflicts with the administrative decisions of the

Department of the Interior Board of Contract Appeals

and the contract appeals boards in other federal

agencies. That argument does not aid petitioner.

It is a sufficient response to petitioner’s argument to

note, as the court of appeals did, that the boards of con-

tract appeals in federal agencies are creatures of the

CDA and their decisions are not binding on the D.C.

Circuit or any other Article III court. 41 U.S.C. 609(b)

(the decision of such boards “on any question of law

shall not be final or conclusive”); Caldwell & Santmyer,

Inc. v. Glickman, 55 F.3d 1578, 1581 (Fed. Cir. 1995)

(“In reviewing the decision of an agency board on any

question of law, we are not bound by the conclusions of

the board.”). Whether procurement contracts include

concession contracts is, of course, a matter of law.

Pasteur v. United States, 814 F.2d 624 (Fed. Cir. 1987).

Moreover, many of the administrative decisions peti-

tioners invoke pre-date the 1998 Act and the regula-

tions subsequently promulgated by the NPS. See, e.g.,

National Park Concessions, Inc., 94-3 B.C.A. (CCH)

q 27,104 (1994) (holding that National Park concession

contract is subject to the CDA whenever the govern-

~ment obtains any benefit; refusing to consider the

Department of the Interior’s regulation stating that

- concession contracts are not procurement contracts, 57

Fed. Reg. at 40,496 (codified in 36 C.F.R. 51.3 (1993)),

because it was published after the date of the contract

and settlement agreement at issue); R & R Enters., 89-

2 B.C.A. (CCH) 4 21,708 (1989) (holding that a NPS

concession contract was subject to the CDA because it

was for services the government would otherwise pro-

vide and because no statutory exemption from the Act

or exclusionary intent by Congress is evident). Still

others did not concern concession contracts at all. See,

e.g., Libra Eng’g Inc., NASA B.C.A. No. 1182-17, 1984

WL 13526 (July 13, 1984) (appeal of Smithsonian

Institution’s termination for default of a construction

contract and related claims; appeal dismissed after

settlement); Grunley Constr. Co., 99-1 B.C.A. (CCH)

q¥ 30,138 (1998) (contractor on contract with Army

Corps of Engineers for repair of the Kennedy Center

roof terrace and penthouse sought equitable adjust-

ment because the government directed it to provide a

specific type of granite; Board assumed jurisdiction

pursuant to the CDA).° "=

3. Petitioner’s assertion that this case has implica-

tions beyond NPS concession contracts, including “a

significant portion of all government procurement con-

tracts,” Pet. 19, is off the mark. While it may well be

true that the “government contracts to purchase more

than $220 billion in goods and services each year,” Pet.

18, those government procurement contracts will not be

affected by the outcome of this case. This case will have

no significant impact on the body of law governing the

purchase of goods and services because this case does

not involve the purchase of goods and services. It con-

cerns only NPS concession contracts.

6 Petitioner contends that the Department of Justice took a

contrary position in Pownd v. United States, No. 94-496C (Fed. Cl.

Aug. 30, 1996). Pet. 15-16. However, there are numerous distinc-

tions between the instant case and Pound. First, as referred to in

the petition (Pet. 16 n.5), the parties in Pownd agreed the CDA

applied because at issue there was Pound’s lease of land-his

possession and control of government property-not his permit to

operate a business. Second, Pound's lease was with the Army

Corp of Engineers, not the NPS, and thus NPS regulations were

net implicated. Third, even if the NPS regulations did have

application, Pound entered into his lease in 1981, many years be-

fore the 1998 Act amended the rules concerning NPS concessions.

Moreover, even without access to a board of contract

appeals, petitioner and the concessioners it represents

will continue to have access to neutral forums for the

resolution of disputes with the NPS over concession

agreements. First, disappointed bidders on concession

contracts have the right to engage in-a bid protest. 28

U.S.C. 1491(b). Second, the 1998 Act itself provides in

two instances for the resolution of disputes through

binding arbitration. See 16 U.S.C. 5954(b)(2), 5956(b).

Finally, depending on the amount of money at issue, a

concessioner may bring a claim in the Court of Federal

Claims under the Tucker Act or in the district court

under the Little Tucker Act. 28 U.S.C. 1346, 1491.

Therefore, contrary to petitioner’s assertions, this case

has no special importance that merits certiorari.

CONCLUSION

The petition for a writ of certiorari should be denied.

Respectfully submitted.