Joint Appendix — National Park Hospitality Association v. Department of the Interior

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No. 02-196

OFFICE OF THR CLERK

In the Supreme Court of the Gnited States

NATIONAL PARK HOSPITALITY ASSOCIATION,

Petitioner,

Vv.

UNITED STATES DEPARTMENT OF THE INTERIOR, ET™AL.,

Respondents.

On Writ of Certiorari to the United States Court

of Appeals for the District of Columbia Circuit

JOINT APPENDIX

KENNETH S. GELLER THEODORE B. OLSON

Counsel of Record Solicitor General

RICHARD B. KATSKEE Counsel of Record

DAVID M. GOSSETT Department of Justice

Mayer, Brown, Rowe & Maw Washington, DC 20530-0001

1909 K Street, NW (202) 514-2217

Washington, DC 20006

(202) 263-3000

Counsel for Federal

Counsel for Petitioner Respondents

PETITION FOR CERTIORARI FILED AUGUST 6, 2002

CERTIORARI GRANTED NOVEMBER !2, 2002

TABLE OF CONTENTS

. Relevant Docket Entries: U.S. District Court for

the District of Columbia

. Relevant Docket Entries: U.S. Court of Appeals

for the District of Columbia Circuit

. Complaint

. Order Granting Certiorari

. “Prospectus Under Which a Concession Contract

Will Be Open For Comeptition For The Operation

Of: Accommodations, Facilities, and Services On

the South Rim of Grand Canyon National Park,”

April 5, 2001 (excerpts)

. Final Rule, Concessions Contracts,

65 Fed. Reg. 20,630 (April 17, 2000) (excerpts)

. Simplified Concession Contracts; Revision,

65 Fed. Reg. 44,894 (July 19, 2000) (excerpts)

NOTICE

The following items have been omitted in printing this

‘

con er Catal am» -

Joint Appendix because they appear on the following pages

in the printed Appendix to the Petition for a Writ of Certio-

rari:

A. Opinion of the United States Court of Appeals for

the District of Columbia Circuit, filed March 1,

B. Opinion of the United States District Court for the

District of Columbia, filed May 23, 2001. .................. 35a

TABLE OF CONTENTS

(continued)

c. Order of the United States Court of Appeals for

the District of Columbia Circuit denying petition

for rehearing; filed May 8, 2002 000.......ccccccccscccecooee-e.

D. Order of the United States Court of Appeals for

the District of Columbia Circuit denying petition

for rehearing en banc, filed May 8, 2002

APPENDIX A

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

No. 00-CV-2885

(Lead Docket: No. 00-CV-2838)

NATIONAL PARK HOSPITALITY ASSOCIATION,

Plaintiff,

UNITED STATES DEPARTMENT OF THE INTERIOR, £7 AL.,

Defendants

RELEVANT DOCKET ENTRIES"

DATE 8 DOCKET ENTRY

[following entries are from Docket in 00-2885]

12/1/00 1 COMPLAINT filed by plaintiff

NATIONAL PARK HOSPITALITY

For the Court’s convenience, the docket entries set forth below

have been revised and reworded to reflect more accurately and

clearly the actual entries contained in the lower court's docket.

Because in the district court this case was consolidated with

three other similar lawsuits, and thereafter the clerk only fully up-

dated the docket sheet in the “lead” case, the docket presented here

is derived from both that in the instant case and that in the “lead”

DATE B

1/19/01 8

1/23/01 14

1/25/01 12

1/30/01 17

2/14/01 24

2/14/01 --

DOCKET ENTRY

ASSOCIATION

MOTION filed by federal defendants to

dismiss complaint, or, in the alternative for

summary judgment

ADMINISTRATIVE RECORD filed by

federal defendants

MOTION filed by DELAWARE NORTH

PARK SERVICES to intervene

ADMINISTRATIVE RECORD filed by

federal defendants

MEMORANDUM/ORDER by Judge

Royce C. Lamberth granting plaintiffs’

joint motion to consolidate case Nos. 00-

2838, 00-2937, 00-2885 and 00-3085

ALL PLEADING IN THIS CASE ARE

BEING DOCKETED AND FILED IN

C.A. 00-2838 PURSUANT TO ORDER

DATED 2/14/01.

[following entries inserted from Docket in 00-2838]

2/28/01 34

2/28/01 36

3/7/01 40

RESPONSE (JOINT) by plaintiffs in

Opposition to motion to dismiss, motion

for summary judgment, and miscellaneous

discovery motions

JOINT MOTION (SECOND) by plaintiffs

for partial summary judgment, on the

grounds that the provisions of the NPS

Solicitations and Regulations Pertaining to

Contract Performance and Concessioner

Choice Violate the 1998 ACT

NOTICE OF SUPPLEMENTAL

DATE

4/9/01

4/24/01

4/30/01

5/18/01

DOCKET ENTRY

AUTHORITY RE: Tucker Act

Jurisdiction and applicability of the

contract disputes act by plaintiffs

MEMORANDUM by federal defendants

Regulations Pertaining to Contract

Performance and Concessioner Choice

Violate the 1998 ACT

REPLY by federal defendants to response

in opposition to motion to dismiss by

federal defendants, motion for summary

judgment by federal defendants

MEMORANDUM AND ORDER by

Judge Royce C. Lamberth granting motion

for DELAWARE NORTH PARK

SERVICES to intervene in 1:00-cv-02937

and 1:00-cv-02885

MOTION filed by intervenor-defendant

DELAWARE NORTH PARK SERVICES

to dismiss complaint

REPLY by plaintiffs in support of joint

motion for partial summary judgment, on

the grounds that the provisions of the NPS

Solicitations and Regulations Pertaining to

Contract Performance and Concessioner

Choice Violate the 1998 ACT, and other

claims

MOTION filed by plaintiff AMF AC

RESORTS, L.L.C for preliminary

injunction

DATE

5/23/01

6/25/01

6/27/01

6/26/01

6/28/01

105

109

112

DATE

7/2/01

DOCKET ENTRY

MEMORANDUM OPINION by Judge

Royce C. Lamberth

ORDER by Judge Royce C. Lamberth:

granting in part, denying in part motion to

dismiss complaint; granting in part and

denying in part joint motion for partial

summary judgment, on the grounds that

Pertaining to Contract Performance and

Concessioner Choice Violate the 1998

ACT

ADMINISTRATIVE RECORD by federal

defendant

JUDGMENT by Judge Royce C.

Lamberth: judgment is entered in favor of

defendants and these cases are dismissed

with prejudice

MOTION filed by plaintiff AMFAC

RESORTS, L.L.C for injunctive relief

pending appeal

MEMORANDUM by plaintiff AMFAC

RESORTS, L.L.C in support of motion for

an injunction pending appeal

7/2/01

7/5/01

[following entry in Docket in 00-2885]

NOTICE OF APPEAL by plaintiff

NATIONAL PARK in 1:00-cv-02885

from judgment order entered on 6/25/01.

[following entries inserted from Docket in 00-2838]

6/27/01

111

MOTION filed by plaintiffs for an

injunction pending appeal

# DOCKET ENTRY

115 MEMORANDUM by federal defendants

in opposition to plaintiffs’ motions for

injunct i

119 MEMORANDUM by intervenor-

defendant DE NORTH PARKS Svc in

opposition to motion for an injunction

pending appeal

114. ORDER by Judge Royce C. Lamberth

denying motions for injunctions pending

appeal and related procedural motions

APPENDIX B

UNITED STATES COURT OF APPEALS

FOR THE DISTRICT OF COLUMBIA CIRCUIT

Nos. 01-5223, 01- 5226, 01- 5229, 01- 5233

AMFAC RESORTS, L.L.C. £7 AL.

Appellants,

Vv.

UNITED STATES DEPARTMENT OF THE INTERIOR, ET AL.,

Appellees

RELEVANT DOCKET ENTRIES’

6/29/01 CIVIL-US CASE docketed. Notice of Appeal

filed by Appellant Amfac Resorts.

7/10/01 PER CURIAM ORDER filed, on the court’s

own motion, that Nos. 01-5223 and 01-5226 be

consolidated

7/10/01 MOTION lodged by Appellant Amfac Resorts

for injunction pending appeal

7/10/01 MOTION filed by Appellant Amfac Resorts to

expedite briefing schedule, and to accelerate the

date for oral argument

"For the Court’s convenience, the docket entries set forth

" below

have been revised and reworded to reflect more accurately and

clearly the actual entries contained in the lower court’s docket.

7/10/01

7/11/01

7/16/01

T/17/01

7/17/01

7/19/01

7/23/01

8/20/01

MOTION filed by Appellant National Park

Hospitality Association for injunction pending

appeal [missing from docket sheet]

MOTION filed by Appellam National Park

Hospitality Association to expedite briefing

schedule, and to accelerate the date for oral

argument [missing from docket sheet]

PER CURIAM ORDER filed, on the court’s

own motion, that Nos. 01-5223, et al. and 01-

5229 be consolidated

OPPOSITION filed by Appellee Delaware North

Park Services to motions for injunction pending

appeal

OPPOSITION filed by federal appellees to

motions for injunction pending appeal

REPLY filed by Appellant Amfac Resorts in

support of motion for injunction pending appeal

REPLY filed by Appellant National Park

Hospitality Association in support of motion for

injunction pending appeal [missing from docket

sheet]

PER CURIAM ORDER filed denying motions

for injunction pending appeal and granting

motions for expedited briefing and oral

argument

CLERK’S ORDER filed consolidating No. 01-

5233 with No 01-5223, et al.

BRIEF filed by Appellant Amfac Resorts, et al.

ADDENDUM TO BRIEF filed by Appellant

Amfac Resorts, et al.

APPENDIX filed by Appellant Amfac Resorts,

9/19/01

10/3/01

11/6/01

3/1/02

4/15/02

5/8/02

5/28/02

8/12/02

et al.

BRIEF filed by Federa! Appellees DOI, et al.,

Non-Federal Appellee Delaware North Parks

Sve, Inc. in 01-5223, et al.

STATUTORY AND REGULATORY

APPENDIX filed by Appellees DOI, et al., in

Nos. 01-5223, et al.

REPLY BRIEF filed by Appellants Amfac

Resorts, et al., in Nos. 01-5223, et al.

ORAL ARGUMENT HELD before Randolph,

Garland, Williams.

JUDGMENT affirming in part, reversing in part

and vacating in part for the reasons in the

accompanying opinion. Before Judges

Randolph, Garland, Williams.

OPINION filed for the Court by Judge Randolph

CLERK’S ORDER filed The Clerk is directed to

withhold issuance of the mandate pending

disposition of any timely petition for rehearing.

PETITION for rehearing & PETITION for

rehearing en banc filed by Appellants

PER CURIAM ORDER, in Banc, filed denying

suggestion rehearing en banc

PER CURIAM ORDER filed denying petition

rehearing

MANDATE ISSUED to Clerk, District Court

NOTICE filed by Clerk, Supreme Court advising

of the filing on 8/6/02 and docketing on 8/8/02

of a petition for writ of certiorari. Supreme

Court Docket No. 02-196.

11/15/02

NOTICE filed by Clerk, Supreme Court advising

of the entry of an order on 11/12/02, granting the

petition for writ of certiorari. Supreme Court

Docket No. 02-196.

APPENDIX C

UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF COLUMBIA

[CAPTION OMITTED}

COMPLAINT

, The National Park Hospitality Association (“NPHA”), for

its Complaint against the United States Department of the

Interior, Secretary of the Interior Bruce Babbitt, and Director

the National Park Service Robert G. Stanton, avers as fol-

Ows:

INTRODUCTION

1. This Complaint results from the latest a t

Department of the Interior’s National Park aa

retary of the Interior, and the Director of the National Park

Service (collectively the “NPS”) to deprive the concessioners

who operate the public concession services in this country’s

national parks of their contractual, statutory, and constitu-

tional nights, centrary to Congress’s expressed intent and the

= interest in promoting the development of park conces-

ions.

2. The NPS has arbitrarily, capriciously, and

interpreted the National Park Service ow aso:

ment Improvement Act of 1998 (“1998 Act”), included as

sections 401-419 of the National Parks Omnibus Manage-

ment Act of 1998, Pub. L. No. 105-391, 112 Stat. 3497 (Nov

13, 1998) (codified with irrelevant exceptions at 16 US.C

§§ 5951-5966), so as to deprive concessioners of their con-

tractual, statutory and constitutional nights.

3. The NPS’s erroneous interpretations of the 1998 Act

were first embodied in its final regulations interpreting that

statute, see “Concession Contracts,” 65 Fed. Reg. 20630

(Apr. 17, 2000), 36 C.F.R. pt. 51 (the “Regulations”), which

ignored the plain terms of the 1998 Act and the objections

raised by the NPHA and others during the rulemaking proc-

ess. Based on these unlawful Regulations, the NPS pub-

lished a model “Standard Concession Contract,” see 65 Fed

Reg. 26052 (May 4, 2000) (the “Standard Concession Con-

tract”), and-has now commenced issuing prospectuses for

new contract opportunities identical to that model.

4. The NPHA and its members object to key provisions

of the prospectuses issued by the defendants, and to the Stan-

dard Concession Contract and Regulations on which they are

based.

5. The regulations, Standard Concession Contract, and

issued prospectuses clearly indicate that the NPS intends:

(i) arbitrarily, capriciously, and unlaw-

fully to choose new or replacement concessioners

by denying many incumbents the contractual nghts

to preferential renewal that- Congress specifically

protected in the 1998 Act; by defining all renewal

preferences too narrowly; and by inappropriately

weighing certain factors for the selection of the best

bid to the detriment of other, statutorily mandated,

criteria.

(ii) arbitrarily, capriciously, and unlaw-

fully to circumscribe how it will interact with con-

cessioners during their contracts by denying

concessioners their statutory right to the protections

of the Contract Disputes Act; by mandating unau-

thorized arbitration for disputes between the NPS

and concessioners; by denying concessioners the

right to encumber their investments to fund further

development within the National Park system and to

refinance existing debt; by denying concessioners

the night to engage in corporate control transactions

without the approval of the NPS; and by retaining

ro ability unilaterally to change many contract

(ii) arbitrarily, capriciously, and unlaw-

fully to determine what payments concessioners are

entitled to receive after a concession contract ex-

pires by undervaluing the concessioners’ “leasehold

surrender interests” and by denying them immediate

compensation for those interests when they are dis-

placed upon the expiration of a concession contract.

The NPS is thus engaged in an illegal plan to deprive

concessioners of their contractual, statutory, and constitu-

tional rights.

6. The NPS ’s attempt to expand its authority at the ex-

pense of concessioners would significantly increase the cost

of running concessions and make the operation of conces-

sions a much less desirable business. Accordingly, it would

harm the millions of Americans who rely on concessioners to

provide affordable services in the country’s national parks

and would thwart Congress’s clear and oft-stated intention to

put park concessions on a more “business-like” footing.

; 7. This Court should therefore declare the Re

invalid to the extent that they violate msm ith wate

tual, statutory, or constitutional rights, and enjoin the NPS

from issuing any new prospectuses (based on the Standard

Concession Contract or otherwise) that infringe on the rights

of concessioners. Injunctive and declaratory relief is neces-

sary to prevent the NPS from continuing its efforts to obtain,

through unauthorized and unlawful regulations, prospectuses

and contracts, restrictions on concessioners that are arbitrary

and capricious, contrary to statutory requirements, and pre-

cluded by contract.

JURISDICTION AND VENUE

8. Jurisdiction in this Court is proper under 28 U.S.C. §§

1331, 1346, 1361, 1491(b)(1), 2201, and 2202, and under 5

U.S.C. § 702.

9. Venue in this District is proper under 28 U.S.C. §

1391(b) and (e).

PARTIES

10. Plaintiff National Park Hospitality Association

(NPHA), which was originally formed as an unincorporated

association called the Western Conference of National Park

Concessioners in 1929, is a non-profit trade association in-

corporated in the Commonwealth of Virginia. The goal of

the NPHA is to enhance the experience of visitors to our na-

tional parks by focusing on issues of common concern, such

as the quality of visitor services and facilities and the rela-

tionship between concessioners and the NPS. This has been

accomplished both by encouraging cooperative projects with

the NPS and by interacting with Congress and other govern-

mental agencies on legislative initiatives to improve the visi-

tor experience, conserve important park resources and protect

the rights of Americans to visit and enjoy their national

parks. With over 150 members, the NPHA represents the vast

majority of park concessioners, both large and small, that

provide service through concession contracts with the NPS.

The NPHA has standing to challenge the Regulations, Stan-

dard Concession Contract and prospectuses. See Hunt v.

Washington Apple Advertising Comm., 432 U.S. 333, 334

(1977). It is an association that exists to represent its mem-

bers in the regulatory context; its members are suffering im-

minent harm because, among other things, their bidding

strategies for the prospectuses that the NPS has issued de-

pend on the outcome of this litigation; and there is no need

for an individualized remedy where, as here, only declaratory

and injunctive relief is sought.

11. Defendant United States Department of the Interior is

an agency of the United States. The National Park Service is

a part of the Department of the Interior.

12. Defendant Bruce Babbitt is Secretary of the Interior

and is sued in his official capacity.

13. Defendant Robert G. Stanton is the Director of the

National Park Service and is sued in his official capacity.

Mr. Stanton is the federal officer personally responsible for

compliance with laws relating to the issuance of concession

contracts.

BACKGROUND

Concessions In The National Park System

14. As set forth by Congress in 16 U.S.C. § 1, the funda-

mental purpose of the National Park system is:

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 generations.

. 15. “Provid[ing] for the enjoyment” of the national parks

In most cases requires visitor service facilities — including

lodges, restaurants, and retail outlets — and typically includes

constructing, cleaning, and repairing those commercial estab-

anon Throughout its history the NPS has relied primar-

ily on private contractors to buil intai

facilities. tt iaaaacataaae

16. The first director of the NPS recognized that “{h]otel

operators and restauranteurs * * * were reluctant to build fa-

cilities and conduct operations in parks that were relatively

inaccessible to most Americans.” He therefore “lured these

businesses into parks by offering them contractual incen-

tives” to counterbalance these extremely risky and frequently

harsh business conditions. See National Park Service, “Con-

cessions Reform” (available at http://www.nps.gov/pub_aff/-

issues/concess.html) (attached as Exhibit 1). Among other

incentives that the NPS has used and continues to use are

awarding exclusive concessions, granting preferential nghts

of renewal, and guaranteeing concessioners that they will re-

coup the capital investments they make if their concessions

are not renewed. In exchange, concessioners agree, among

other things, to return an agreed-upon portion of gross reve-

nues to the government and to make specified capital com-

mitments to improve national park visitor facilities.

The Concessions Policy Act Of 1965

17. Although in 1998 Congress repealed the Concessions

Policy Act of 1965 (the “1965 Act”), Pub. L. 89-249, 79

Stat. 969 (Oct. 9, 1965), formerly codified at 16 U.S.C. §§

20-20g, almost all concessioners are currently operating un-

der contracts that were issued pursuant to the 1965 Act and

that embody 1965 Act policies and practices. The savings

clause of the legislation that repealed the 1965 Act, see infra

4 25, provides that these contracts remains valid and enforce-

able.

18. The 1965 Act was designed to encourage concession-

ers to make necessary capital investments in national park

facilities without diverting financial resources from the gov-

ernment. It protected concessioners from arbitrary NPS ac-

tion by codifying the previous NPS practice of giving

concessioners (i) a compensable property interest in capital

projects and (ii) a right of preference in the renewal of con-

cession contracts. Based on these two primary incentives,

concessioners invested hundreds of millions of dollars in

park facilities to serve the public. It is unlikely that conces-

sioners would have been willing to make these investments if

the 1965 Act had not been passed and these incentives not

been given the force of law; indeed, concessioners had previ-

ously slowed their capital programs in reaction to legal ques-

tions raised about the validity of these nghts.

19. The 1965 Act explicitly recognized concessioners’

property rights in the facilities constructed during the course

of a concession contract by codifying a federal right called

ee uanicnars’ “posssssory interest” thet hed been 2 fee-

y concession contracts since the 1940’s.

6 of the 1965 Act states: a

A concess:omer who * * * acquires or constructs

pursuant .» a contract and with the approval of the

Secretary, any structure, fixture, or improvement

upon land owned by the United States within an

area administered by the National Park Service shall

have a possessory interest therein, which shall con-

sist of all incidents of ownership except legal ti-

tle***. The said possessory interest shall not be

extinguished by the expiration or other termination

of the contract and may not be taken for public use

without just compensation.

16 U.S.C. § 206.

_ 20. Congress also defined the exact method of valuing

this possessory interest, assuring that the concessioner would

receive protection for the “sound value” of its interest. The

1965 Act defined “sound value” by explicit reference to the

“reconstruction cost” of the facilities, rather than their lower

replacement cost. bid.

21. Section 5 of the 1965 Act mandated that concession-

ers be given a “right of preference” in the renewal of their

concession contracts:

The Secretary shall encourage continuity of opera-

tion and facilities and services by giving preference

in the renewal of contracts or permits and in the ne-

gotiation of new contracts or permits to the conces-

sioners who have performed their obligations under

prior contracts or permits to the satisfaction of the

Secretary.

16 U.S.C. § 20d.

22. These statutorily-required, contractual rights of re-

newal were critical to the decision of many concessioners to

bid on concessions contracts and to invest in facilities devel-

opment within the National Park system.

The Concessions Management Improvement Act Of 1998

23. Concerned with the NPS’s management of the con-

cessions program and other factors, Congress passed the

1998 Act on October 14, 1998, which President Clinton

signed on November 13, 1998. The 1998 Act sought to fur-

ther the mission of the national park system, by protecting

the parks for the future while at the same time accommodat-

ing the need of users of the parks to have appropriate facili-

ties and services. See 1998 Act § 402, 16 U.S.C. § 5951.

24. The 1998 Act governs the entire concessions contract

process, from delineating the factors that confine the NPS’s

choice of concessioner at the outset to ensuring that conces-

sioners’ rights are protected when a contract expires.

25. The 1998 Act replaced the 1965 Act, which as a gen-

eral matter was repealed. See 1998 Act § 415(a), 16 U.S.C.

§ 20 note. The 1998 Act specifically includes a savings

clause, however, which provides:

The repeal of [the 1965 Act] shall not affect the va-

lidity of any concessions contract or perm# entered

into under such Act, but the provisions of [the 1998

Act] shall apply to any such contract or permit ex-

cept to the extent such provisions are inconsistent

with the terms and conditions of any such contract

or permit. ;

Ibid.

26. Thus, the 1998 Act protects the fundamental nights

that were guaranteed to concessioners under the 1965 Act

and under contracts issued pursuant to the 1965 Act. In par-

ticular, the savings clause makes the 1998 Act inapplicable

eh einen grnaiane an tana istent with the terms

of any * * * contract” issued pursuan

1965 Act. Ibid. —

The Regulations And Model “Standard Concession Con-

tract”

27. The NPS promulgated draft regulations i lementing

the 1998 Act on June 30, 1999, and issued a draft Standard

Concession Contract (that it represented would form the basis

for future contracts) on September 3, 1999. In response to

extensive commentary by the NPHA and others, the NPS

modified both documents in some respects, but refused to

address many of their most serious flaws. The final versions

of the Regulations and model contract were published in

April and May 2000, respectively. See 4 3, supra.

28. In the guise of “interpreting” the 1998 Act, the NPS

adopted untenable positions on a number of issues critical to

the concessions industry (see 4] 38-102, infra) including

persisting in following policies that Congress considered and

rejected in enacting the 1998 Act. The NPS’s attempt to ex-

pand Its power over concessioners and ignore their vested

nights will harm not just current concessioners, but also fu-

The Hamilton Stores Prospectus

. 29. On October 2, 2000, almost five months

lishing the Standard Conlon Gunmen, G0 108 heute

Sat crn Proapectas soliciting bids under the 1998 Act

agency's implementing Regulations . That prospec-

tus, Contract No. CC-Yell002-70 (the “Hamilton Stores Pro-

spectus”) (attached as Exhibit 2), covers the Yellowstone

National Park general stores and food services concession

currently served by Hamilton Stores, Inc. Hamilton Stores,

which is a member of the NPHA, is operating these facilities

under a contract issued pursuant to the 1965 Act and has per-

formed all of its requirements under that contract satisfacto-

rily.

30. The contract required by the Hamilton Stores Pro-

spectus is in all relevant respects identical to the final Stan-

dard Concession Contract. Like the Regulations and

Standard Concession Contract, it contains numerous illegal

provisions, in violation of Hamilton Stores’ current contract

and the 1998 Act, that would deprive Hamilton Stores of its

rights and would force it and any other bidder to agree to il-

legal and unfair terms in order to obtain the concession.

The Antelope Point Prospectus

31. On October 23, 2000, the NPS issued a second pro-

spectus under the 1998 Act, for a new concession operation

to be conducted at Antelope Point in the Glen Canyon Na-

tional Recreation Area (the “Antelope Point Prospectus,”

Contract No. CC-GLCA007-01, attached as Exhibit 3). Be-

cause this prospectus is for a new facility there is no provi-

sion for an incumbent concessioner’s renewal rights, nor for

the calculation of that incumbent’s possessory interest. In all

other relevant respects, however, the Antelope Point Prospec-

tus is identical to the Hamilton Stores Prospectus and the

Standard Concession Contract, and is thus further confirma-

tion of the NPS’s decision systematically to undermine the

rights of concessioners.

Future 1998 Act Prospectuses

32. Based on the Regulations, Standard Concession Con-

tract, Hamilton Stores Prospectus, and Antelope Point Pro-

spectus, the NPS has made clear that no future prospectuses

will honor concessioners’ contractual preferential nights of

renewal. The NPS has also made clear that all new prospec-

tuses will violate a substantial number of concessioners’

other rights, as well as the clear terms of the 1998 Act.

33. At least one concessioner has therefore brought litiga-

tion challenging the Regulations and Standard Concession

Contract and seeking to obtain injunctive relief barring the

issuance of a new prospectus for a specific concession. See

Amfac Resorts, L.L.C. v. U.S. Dept. of the Interior, No.

1:98CV01734; Amfac Resorts, L.L.C. v. U.S. Dept. of the In-

terior, No. 1:00CV02838.

34. The NPHA, as the association representing almost all

concessioners, seeks similar relief that would be more gener-

ally applicable to all concessioners and all prospectuses.

Given the harm that the NPS’s interpretation is causing con-

cessioners, no good reason exists for further delay before

challenging the NPS’s unlawful interpretation of the 1998

Act and of contracts issued pursuant to the 1965 Act.

SPECIFIC ALLEGATIONS

35. The NPHA’s specific chall cover many aspects

of tes sitetionthlp bebwemn conseedlanan ond too YE toe

rules by which new concessioners will be chosen, the rules

governing how such concessioners will be treated during the

period of concessions contracts (which rules will materially

impact what concessioners will bid on such contracts), and

the rules governing how incumbent concessioners’ posses-

sory interests or leasehold surrender interests will be calcu-

lated and when those interests will be paid to incumbents.

36. The Regulations, as well as the contractual implemen-

tation of those Regulations as evidenced by the Standard

Concession Contract and the Hamilton Stores and Antelope

Point Prospectuses, violate the 1998 Act in numerous ways

as delineated below. In addition, the Regulations, both on

their face and as applied, invade existing contractual rights of

incumbent concessioners preserved by the 1998 Act. They

are thus arbitrary, capricious, an abuse of the agency’s dis-

cretion, and otherwise unlawful.

37. The Standard Concession Contract and the Hamilton

Stores and Antelope Point Prospectuses also violate the 1998

Act, and among other things deny Hamilton Stores and other

incumbent concessioners the preferential right of renewal

that they are entitled to by law. Thus, the Standard Conces-

sion Contract and all current and future NPS prospectuses

based on it are arbitrary, capricious, an abuse of the agency’s

discretion, and otherwise unlawful.

*“**

OPERATION OF CONTRACTS

61. In its Regulations, Standard Concession Contract, and

Hamilton Stores and Antelope Point Prospectuses the NPS

has imposed improper conditions on the performance of con-

cession contracts and on the avenues through which disputes

concerning those contracts must be resolved. These final

agency actions are arbitrary, capricious, and contrary to law.

62. The manner in which the NPS deals with its conces-

sioners is a significant factor in how much concessioners

(whether incumbent or otherwise) will bid for concessions

contracts. This Court should therefore declare the Regula-

tions to be arbitrary, capricious, and unlawful and enjoin the

NPS from issuing new prospectuses that would operate under

this scheme.

Applicability Of The Contract Disputes Act

63. The NPS has decreed that “[c]oncession contracts are

not contracts within the meaning of * * * the Contract Dis-

putes Act [41 U.S.C. § 601 ef seg. (“CDA”)].” 31 C.F.R.

§ 51.3. There is no basis for this attempt to exempt conces-

sions contracts from the CDA, thus rendering the Regulations

arbitrary, capricious, and contrary to the terms of the CDA.

64. The CDA applies to “any express or implied contract

* ** entered into by an executive agency for (1) the pro-

curement of property, other than real property in being; (2)

the procurement of services; (3) the procurement of construc-

tion, alteration, repair or maintenance of real property; or (4)

the disposal of personal property.” 41 U.S.C. § 602(a).

65. The CDA creates fair dispute resolution procedure

for contracts with federal agencies. Among other soniiaiie

the CDA mandates that certain agency decisions about con-

tracts be appealable to the Court of Federal Claims, 41

U.S.C. § 609(a)(1), which must review questions of law de

novo, 41 U.S.C. § 609(a)(3).

66. Concessions contracts under the 1998 Act are covered

by the CDA. The CDA applies “notwithstanding any con-

tract provision, regulation, or rule of law to the contrary.” 4]

U.S.C. § 609(a)(1). The NPS is contracting to procure the

provision of services by concessioners, to guarantee the

availability of lodging, food and other amenities within the

National Park system. The NPS also is procuring the mainte-

pera ~ property, because the concessioner does not ac-

€ to any structure it creates on Nati

lands under a 1998 Act contract. a St

concessions contracts where the NPS chooses to require the

concessioner to make significant capital improvements, the

NPS is procuring the “construction, alteration, repair or

maintenance” of that property.

_ 67. The applicability of the CDA to concession contracts

is important to concessioners because NPS concession con-

tracts are of lengthy duration, often require significant up-

front financial commitments, and by their terms provide the

agency with broad unilateral discretion to alter many

of those contracts over time. The unlawful decision by the

NPS to exempt itself from the CDA is thus of great impor-

tance to the contract solicitation process.

** *

INJUNCTIVE RELIEF

103. The NPHA is entitled to preliminary injunctive re-

lief because it can show a likelihood of success on the merits,

and both the public interest and a balancing of the potential

harms weigh in favor of preserving the status quo and pre-

venting the NPS’s unlawful implementation of the 1998 Act.

104. The NPHA is also entitled to injunctive relief be-

cause there is no adequate legal remedy for the claims as-

serted herein. Unless enjoined preliminarily and

permanently, defendants’ actions and conduct will bring ir-

reparable harm to the NPHA’s members as potential bidders

and existing concessioners whose preferential rights of re-

newal and other legal rights are being illegally frustrated by

unlawful government agency action. The NPS’s final actions

~ as set forth in the Regulations, Standard Concession Con-

tract, Hamilton Stores Prospectus, and Antelope Point Pro-

spectus — will also injure the public’s interest in an orderly

continuation of services in the country’s national parks.

105. To preserve the rights of concessioners and the

public interest, the Court should permanently enjoin the NPS

from issuing prospectuses that fail to recognize incumbent

concessioners’ preferential right of renewal and that embody

the arbitrary, capricious, and otherwise illegal policies and

provisions described above.

COUNT I

(The Regulations Violate The Administrative Procedure

Act)

106. Paragraphs 1-105 are incorporated herein as if set

forth in full.

107. Under the Administrative Procedure Act, 5 U.S.C.

§ 551 et seq., a reviewing court has a duty to “hold unlawful

and set aside” agency action found to be any of the follow-

ing: (1) “arbitrary, capricious, an abuse of discretion, or oth-

erwise not in accordance with law;” (2) “contrary to

constitutional right, power, privilege, or immunity;” (3) “in

excess of statutory jurisdiction, authority, or limitations, or

short of statutory right;” and (4) “unsupported by substantial

evidence.” 5 U.S.C. § 706(2).

108. The NPS’s “Concession Contracts” Regulations

65 Fed. Reg. 20630 (Apr. 17, 2000), 36 C.F.R. pt. 51, must

be held unlawful and set aside because they violate the 1998

Act, the ADRA, the CDA, and other Statutory mandates in

the numerous ways delineated above.

COUNT II

(The Standard Concession Contract Violates The Admin-

istrative Procedure Act)

109. Paragraphs 1-105 are incorporated herein as i

forth in full. nen

110. Under the Administrative Procedure Act, 5 U.S.C.

§ 551 ef seq., a reviewing court has a duty to “hold unlawful

and set aside” agency action found to be any of the follow-

ing: ( 1) “arbitrary, capricious, an abuse of discretion, or oth-

erwise not in accordance with law;” (2) “contrary to

constitutional right, power, privilege, or immunity;” (3) “in

excess of statutory jurisdiction, authority, or limitations, or

short of statutory right;” and (4) “unsupported by substantial

evidence.” 5 U.S.C. § 706(2).

111. The Standard Concession Contract is plainly in-

tended by the NPS to embody the exact terms and conditions

of future prospectuses under the 1998 Act. Not only is the

Standard Concession Contract consistent with the Regula-

tions, but the Hamilton Stores Prospectus and Antelope Point

Prospectus are also in all relevant respects identical to

Standard Concession Contract. -

112. The Standard Concession Contract must be held

unlawful and set aside, because (as delineated above) it con-

tains numerous terms that violate the 1998 Act, the 1965 Act,

other statutory mandates, and contractual obligations of the

agency under its existing contracts with concessioners.

COUNT Ill

(The Standard Concession Contract Violates The Tucker

Act)

113. Paragraphs 1-105 are incorporated herein as if set

forth in full.

114. Under the Tucker Act, 28 U.S.C. § 1491, a review-

ing court has a duty to “afford any relief that the court con-

siders proper, including declaratory and injunctive relief

except that monetary relief shall be limited to bid preparation

and proposal costs” (28 U.S.C. § 1491(b)(2)), if agency ac-

tion related to the “solicitation * * * for bids or proposals for

a proposed contract or to the award of a contract or any al-

leged violation of statute or regulation in connection with a

procurement or a proposed procurement” (28 U.S.C.

§ 1491(b)(1)) is found to be any of the following: (1) “arbi-

trary, capricious, an abuse of discretion, or otherwise not in

accordance with law;” (2) “contrary to constitutional right,

power, privilege, or immunity;” (3) “in excess of statutory

jurisdiction, authority, or limitations, or short of statutory

right;” and (4) “unsupported by substantial evidence” (28

U.S.C. § 1491(b)(4) (incorporating the APA standard)).

115. The Standard Concession Contract is plainly in-

tended by the NPS to embody the exact terms and conditions

of future prospectuses under the 1998 Act. Not only is the

Standard Concession Contract consistent with the Regula-

tions, but the Hamilton Stores Prospectus and Antelope Point

Prospectus are also in all relevant respects identical to the

Standard Concession Contract.

116. The Standard Concession Contract must be held

unlawful and set aside, because (as delineated above) it con-

tains numerous terms that violate the 1998 Act, the 1965 Act,

other statutory mandates, and contractual obligations of the

agency under its existing contracts with concessioners.

***

RELIEF REQUESTED

WHEREFORE, for the foregoing reasons, plaintiff re-

quests that the Court:

A. Enter preliminary injunctive relief pending final reso-

lution of this matter barring the defendants, their officers,

employees and agents, from implementing or enforcing any

of the unlawful aspects of 36 C.F.R. pt. 51 and of the Stan-

dard Concession Contract, and in particular barring them

from proceeding with the Hamilton Stores and Antelope

Point Prospectuses.

B. Grant a preliminary and permanent injunction enjoin-

ing defendants from issuing new prospectuses that infringe

on the nights of incumbent concessioners in any of the ways

described in this Complaint.

C. Enter a declaratory judgment that defendants’ prom-

ulgation of 36 C.F.R. pt. 51, the Standard Concession Con-

tract, the Hamilton Stores Prospectus, and the Antelope Point

Prospectus were in the respects described above arbitrary,

capricious, contrary to constitutional right, pow r, privilege

or immunity, in excess of statutory jurisdiction, authority or

limitations, contrary to concession contracting laws and regu-

lations including but not limited to the 1998 Act, an abuse of

discretion, and otherwise not in accordance with law.

D. Enjoin the defendants to develop a constitutional pro-

cedure for the appeal from determinations of whether a con-

cessioner’s performance was satisfactory.

E. Order such other and further relief as the Court deems

appropriate.

Respectfully submitted,

/s/

Kenneth S. Geller (DC Bar # 401130)

David M. Gossett (DC Bar # 468390)

MAYER, BROWN & PLATT

1909 K Street, NW

Washington, DC 20006

Tel: 202-263-3000

Fax: 202-263-3300

Counsel for Plaintiff National Park

Hospitality Association

Dated: December 1, 2000

APPENDIX D

SUPREME COURT OF THE UNITED STATES

No. 02-196

NATIONAL PARK HOSPITALITY ASSOCIATION,

Petitioner,

Vv.

UNITED STATES DEPARTMENT OF THE INTERIOR, ET AL. ,

Respondents.

November 12, 2002

The petition for a writ of certiorari is granted.

APPENDIX E

PROSPECTUS

Accommodations, Facilities and Services,

South Rim, Grand Canyon National Park

National Park Service

[This table of contents has been added to indicate which sec-

tions of the Prospectus are included in this Joint Appendix,

and on which page each included section starts]

Page

pe 32

SUMMARY OF BUSINESS OPPORTUNITY .......... omitted

ED GP EOIN © ccsccscceccsscscccsscscecssscsnscesnsscssens 37

THE PARK AREA AND ITS MISSION................:ccceccee00+ 49

CONTRACT

TICE snsnedstesetiieneninastanasimninel 64

EXHIBITS ,

A. Leasehold Surrender Interest................. omitted

B. Operating Plan Supplements ............. selections

included, at

117

C. Nondiscrimination.................:0ccseeeees omitted

D. Land and Assignments .............-..--:+-0+++ omitted

E. Government Personal Property

eee omitted

Fe ee omitted

G. Initial Leasehold Surrender Interest ......omitted

H. Maintenance Plan Supplement.............. omitted

FF Qa omitted

J. Historic Personal Property................-..-: omitted

PROPOSAL INSTRUCTIONG.............:ccccccceseeeeeereeeees omitted

i A 6 selections

included, at

121

Page

APPENDICES

1. National Park Service and Its Mission;

Concession Program Management........................ 137

2. Public Law 105-391 Title IV: National Park

Service Concessions Management

Improvement Act Of 1998. .00............:ccccceseeceeee omitted

3. 36 CFR, Part 51: Concession Management

i icenncncctensenticiaiiiiiiinitiinemaaitel omitted

4. 2001 NPS Management Policies, Chapter 10:

Commercial Visitor Services.....................-.- selections

included, at

153

eB Ce tretcincnrrnsensiintsisadnimenmneiaiial omitted

6. 2000 Approved Rates ..0..0...........ccccecseeseecenseees omitted

7. Sample Operating Schedule ...........................- omitted

8. Concessioner’s Financial Information............. omitted

EN omitted

10. Agreement for Determining the Value of the

Possessory Interest in Certain Improvements

under NPS Concession Contract No. CC-

GRCA001-69; Statement of Value................. omitted

11. Reclaimed Water Agreement .......................... omitted

12. Changes in Insurance Requirements. .............. omitted

Fa COUR CIID siennsinatetenataniiliinenbcatiietngipadmanagia omitted

14. Personal Property List. ..................-cseccsessessenee omitted

15. Underground Storage Tanks.........................-+. omitted

16. Grand Canyon Project Review Process;

Grand Canyon National Park Construction

PIII ssictasntniishinieeiiteininnstinapiitatientioniingaiiaaaumssasiial omitted

Uae Sa EEEE Unhnelaihieiihiiieidiserilliapainsenibiicnadiiatitainpanntaias omitted

18. Tank Project Check List...............c.ccsessesseseesees omitted

19. Draft Grand Canyon National Park

Government Housing Policy Statement .......... omitted

Page

20. Grand Canyon Hazardous Waste Management

TI snentnreninrninsiennnitnimalmaaetinaitapinaennncemenenmemensd omitted

21. Community Recreation Center Special Use

TTI dornsenspeiennnmpeunianemuameneeeanenemennnens omitted

22. Special Rules for Management and Operation

of Concessioner Operated Trailer Villages .....omitted

23. Grand Canyon National Park map

brochures and newspapet ................c-00se+see00 omitted

[Prospectus begins on next page]

32 33

PROSPECTUS THE PARK AREA AND ITS MISSION

South Rim Accommodations, Facilities and Services DESCRIPTION OF PARK

CC-GRCA001-01 Park Headquarters Location

Table of Contents Legislated Purpose and Significance of Park

a; Compliance with Federal, State, and Local Laws and

SUMMARY OF BUSINESS OPPORTUNITY Park lariediction

BUSINESS OPPORTUNITY Fue Fretectien

Park Management Structure

ee ea cg Park Interpretive Themes and Goals

t Season

ae PARK PLANNING DOCUMENTS AND PLANNED

The Current Contract

Facilities IMPROVEMENTS

THE BUSINESS TO BE OPERATED PARK MANAGEMENT OBJECTIVES FOR CON-

Facilities and Services at Beginning of Contract CN San VELES

Basic Financial Information CONTRACT

FUTURE OPERATIONS

Building & Improvement Program DRAFT CONTRACT

Project Costs EXHIBITS

Transportation A. Leasehold Surrender Interest

Bavicumentel Management B. Operating Plan Supplements

ouaees C. Nondiscrimination

PROPERTY OWNERSHIP AND PURCHASE D. Land and Assignments

Personal Property . E. Government Personal Property Assigned

Real Property F. Project Procedures

Estimates of Value G. Initial Leasehold Surrender Interest

FRANCHISE FEES H. Maintenance Plan Supplement

I. Insurance

SITE VISITS J. Historic Personal Property

PROPOSAL INSTRUCTIONS

Response Period for Submission of Proposal

Form in Which Proposal Must be Submitted

Where and How to Submit a Proposal

Proposals may be Considered Public Documents

Questions

Standards for Evaluation of Proposals and Selection

Right of Preference and Preferred Offeror Determinations

Congressional Review

Cautions to Offerors about Submission and Evaluation of

Proposals

PROPOSAL PACKAGE

PROPOSAL LETTER

CERTIFICATE OF CORPORATE OFFEROR

PART A FACTORS AND REQUIREMENTS |

PART B FACTORS AND QUESTIONS

Principal factor 1. The responsiveness of the Pro-

posal to the objectives, as described in the

prospectus, of protecting, conserving and pre-

serving resources of the park area.

Principal factor 2. The responsiveness of the Pro-

posal to the objectives, as described in the

prospectus, of providing necessary and appro-

priate visitor services at reasonable rates.

Principal factor 3. The experience and related back-

ground of the Offeror, including the past per-

formance and expertise of the offeror in

providing the same or similar visitor services

as those to be provided under the concession

contract.

Principal factor 4. The financial capability of the Of-

feror to carry out its proposal.

Principal factor 5. The amount of the proposed

minimum franchise fee, if any, and/or other

forms of financial consideration to the Direc-

tor (However, consideration of revenue to the

United States will be subordinate to the objec-

tives of protecting, conserving, and preserving

resources of the park area and of providing

necessary and appropriate visitor services to

the public at reasonable rates.)

SECONDARY SELECTION FACTORS

Secondary factor 1. The quality of the Offeror’s pro-

posal to conduct its operations in a manner

that furthers the protection, conservation and

preservation of park area and other resources

through environmental management programs

and activities, including, without limitation,

energy conservation, waste reduction, and re-

cycling.

Secondary factor 2. The quality of the Offeror’s pro-

posal to provide needed employee housing

and to adaptively convert existing housing to

guest lodging.

Secondary factor 3. The quality of the Offeror’s pro-

posal to conduct its hiring, training and reten-

tion program for employees in such a way that

furthers its ability to provide exemplary cus-

tomer service beyond the basic requirements

of the draft contract.

APPENDICES

1. National Park Service and Its Mission; Concession

Program Management

Public Law 105-391 Title IV: National Park Service

Concessions Management Improvement Act of

1998.

36 CFR, Part 51: Concession Management Regula-

tions.

2001 NPS Management Policies, Chapter 10: Com-

mercial Visitor Services.

Park Visitation

2000 Approved Rates

Sample Operating Schedule

Concessioner’s Financial Information

Existing Contract

Agreement for Determining the Value of the Posses-

sory Interest in Certain Improvements under NPS

Concession Contract No. CC-GRCA001-69; State-

ment of Value

. Reclaimed Water Agreement

Changes in Insurance Requirements.

. Utility Expense

Personal Property List.

. Underground Storage Tanks

. Grand Canyon Project Review Process; Grand Can-

yon National Park Construction Policies

. XXX form

Tank Project Check List

Draft Grand Canyon National Park Government

Housing Policy Statement

Grand Canyon Hazardous Waste Management Plan

. Community Recreation Center Special Use Permit

. Special Rules for Management and Operation of

Concessioner Operated Trailer Villages

. Grand Canyon National Park map brochures and

newspaper

BUSINESS OPPORTUNITY

South Rim Accommodations, Facilities and Services

CC-GRCA001-01

This Prospectus describes the existing business and the busi-

ness opportunity to operate Accommodations, Facilities and

Services on the South Rim and at Phantom Ranch in Grand

Canyon National Park in general terms. Potential Offerors

are responsible for reviewing all sections of this prospectus

and specifically the terms and conditions of the attached

Draft Contract, including its exhibits, to determine the full

scope of a concessioner’s responsibilities under the new con-

tract.

All interested parties must apply using the guidelines in the

Proposal Instructions and Package.

CURRENT OPERATIONS

All facilities and services to be authorized by the National

Park Service (NPS) under this contract are located on the

South Rim of Grand Canyon National Park.

Grand Canyon National Park is a World Heritage Site.

Grand Canyon National Park attracts 4.5 to 4.9 million visi-

tors a year, with most visitation occurring from March to Oc-

tober. Visitation ranges from over 150,000 to 650,000 per

month. Approximately 40% of the park’s visitors are from

outside the United States, from locations around the world.

The National Park Service has determined that certain visitor

services and facilities are necessary and appropriate to en-

hance visitors’ enjoyment of the park, while ensuring that

resources are protected. A number of major concession con-

tracts currently exist in Grand Canyon National Park, of

which this is the largest:

° Amfac Resorts, LLC, dba Grand Canyon National

Park Lodges, provides overnight lodging, food ser-

vice, transportation, gift shops, public showers, public

laundries, kennels, a service station and mule opera-

tions on the South Rim and at Phantom Ranch.

° TW Recreational Services, Inc., a subsidiary of Am-

fac Parks and Resorts, Inc., provides overnight lodg-

ing, food service and gift shops on the North Rim.

° Delaware North Parks Services operates Canyon Vil-

lage Marketplace, a general store including groceries,

camping supplies and deli, on the South Rim.

° Verkamps, Inc. provides a gift shop on the South

Rim.

° Grand Canyon Trail Rides provides guided mule and

horse rides on and from the North Rim.

° A number of concessioners provide guided river run-

ning trips on the Colorado River.

In addition, approximately 350 operators provide road tours,

guided backpacking, guided day hikes, outfitting, locksmith

services and horseback rides under other authorizations.

Staffing at Peak Season

° National Park Service staff consists of approximately

325 full-time employees, and 100 less-than-full-time

and seasonal employees.

° Amfac Resorts, LLC, dba Grand Canyon National

Park Lodges, has approximately 900 full-time staff

and 300 seasonal employees.

° In total, approximately 2500 people live year-round,

and another 1000 live seasonally, on the South Rim

of the Grand Canyon. In addition, about 500 more

people live in the gateway community of Tusayan.

National Park Service and Amfac Resorts, LLC administra-

tive offices are located on the South Rim of Grand Canyon

National Park. Year-round services include a K-12 school,

medical clinic, post office, bank, general store, church, day

care and recreation center.

Many permanent employees reside in the village year-round.

Housing in gateway communities is extremely limited. The

closest communities with viable housing markets are Wil-

liams, Arizona, 60 miles away, and Flagstaff, Arizona, 85

miles away.

The Current Contract

The current contract expires on December 31, 2001. The Di-

rector, pursuant to 36 CFR Part 51, has determined that this

is not a qualified concession contract, because it is antici-

pated that receipts in the first year of the new contract will

exceed $500,000, and the new concession contract will not

solely authorize or require guide services. Therefore no pre-

ferred Offeror for this contract exists.

Facilities

The condition of the facilities varies. Additional employee

housing is a critical need. The Exhibits to the Draft Contract,

which are part of this document, describe the buildings and

land assigned and the trails to be used.

The new concessioner will be assigned lands and facilities in

Grand Canyon National Park necessary for the operation, and

will be required to maintain the lands and facilities in a man-

ner acceptable to the NPS. Specific operating and mainte-

nance requirements are detailed in the Operating and

Maintenance Plans, Exhibits B and H to the Draft Contract.

THE BUSINESS TO BE OPERATED

This business operates facilities and services for visitors to

Grand Canyon National Park, principally at three developed

areas along the South Rim: Hermits Rest, Grand Canyon

Village, and Desert View. It also provides facilities and ser-

vices at Phantom Ranch, near the Colorado River. This

business also includes transportation services and mule liv-

ery.

Most of the facilities are open 7 days a week, 12 months a

year.

A. Facilities and Services at Beginning of Contract

1. Overnight Accommodations Numberof Lodging Type

Rooms

E! Tovar Hotel 78 Deluxe hotel

rooms

Kachina/Thunderbird Lodges 104 Deluxe motel

rooms .

Bright Angel Complex 39 Rustic rooms

Bucky/Powell Motel

(with and without bath)

Historic cabins 35 Mid-scale cabins

Rim Cabins 15 Deluxe cabins

Maswik Complex

Maswik Lodge North 160 Mid-scale motel

rooms

Maswik Lodge South 90 Economy motel

rooms

Maswik Quad Cabins 28 Economy cabins

Yavapai Complex

Yavapai East 198 Mid-scale motel

rooms

Yavapai West 160 Economy motel

rooms

Phantom Ranch

Cabins without bath 11 Rustic cabins

Dormitories (10-person, 4 Rustic dormitories

same gender occupancy)

Rustic rooms and cabins are adequately furnished to com-

plement their historic role in park accommodations. They

have bathrooms & showers located in close proximity. Some

may have private bathrooms.

Economy Rooms and Cabins are adequately furnished with

average quality motel furnishings to complement park

themes. They have private bathrooms.

Mid-scale accommodations are adequately furnished with

above average furnishings to complement park themes. All

accommodations in this price range have private bathrooms.

Daily housekeeping service is provided.

Deluxe accommodations are located in or near full service

hotels or lodges and are adequately furnished with the high-

est quality resort-type furnishings to complement park

themes. They may have small refrigerators, fireplaces or sit-

ting rooms. Daily housekeeping service and special ameni-

ties are provided.

2. Food and Beverage Service

a. Food Service

E! Tovar Hotel 250 B,L,D Gourmet/Fine

Dining Restaurant

Arizona Room 120 L,D Dinner Only

Bright Angel 120 B,L,D Full Service Cof-

Dining fee Shop

Bright Angel 0 Snacks Limited Snack

Fountain Bar

Maswik Cafete- 395 B,L,D Cafeteria

ria

Yavapai Cafete- 475 B,L,D Cafeteria

ria

Phantom Ranch 44 B,D,box Rustic Family

lunches Service

Desert View 30 B,L,D Snack Bar

Trading Post

Hermits Rest 0 Snacks Limited Snack

Bar

b. Lounge Service

e Arizona Steakhouse 20 seats

e Bright Angel Lodge 80 seats

c. Transportation/Visitor Information Desks

-- Bright Angel Lodge

-- Yavapai Lodge

-- Maswik Lodge

General Merchandise

El Tovar Gift Shop and News Stand

Bright Angel Lodge Gift Shop

Maswik Lodge Gift Shop

Yavapai Lodge Gift Shop

Desert View Trading Post Gift Shop

Desert View Watchtower Gift Shop

Hermits Rest Gift Shop

Lookout Studio Gift Shop

Hopi House Gift Shop

Sgr eer Services

Scheduled In-Park Bus Tours (to sunset when

Transportation Contract is implemented)

Step-on Guide Services (to sunset when Transporta-

tion Contract is implemented)

24-hour Taxi Service

Automobile Services

Desert View Service Station

24-hour Tiltbed Towing Service with road-side re-

pair service

24-hour Credit Card fueling access at Desert View

Service Station

Mule Operations

Plateau Point Mule Rides

Phantom Ranch Mule Rides

Transport of soft-sided luggage to and from Phan-

tom Ranch (Duffel Service)

Emergency evacuation of visitors Sen the inner

canyon by mule (Dragout Service)

Kennels for cats and dogs (may sunset when the Trans-

portation Contract is implemented)

Camper Services

Laundromat

9. Trailer Village

Cooperator Employees only — 86 sites

~ © Long term Trailer Village for NPS, Concession and

Cooperator Employees only at Pinyon Park — 39

sites

10. Off-site Reservation System for all applicable services.

This system will utilize a toll-free number.

11. Other

Vending (as defined by NPS)

Interpretive Programs

Concierge Services

Pay Phones

12. Support Services

e Employee Housing and Meals

Basic Financial Information

Approved rates for 2000 are located in Appendix 6. Rates to

the public are subject to approval by the National Park Ser-

vice, under 16 U.S.C. 5955. Rates may be changed at the

request of the concessioner subject to approval by NPS under

16 U.S.C 5955.

Historically, this business has been consistent from year to

year in its reported revenue. Further financial information

and use rates are available in Appendix 8, Financial Informa-

tion.

The Proposal Package requires Offerors to develop financial

projections based upon the business to be operated and the

projects required. Offerors should be appropriately cautious

in the use of historical information. The National Park Ser-

vice will not provide financial predictions; therefore, Offer-

ors are responsible for producing their own pro forma finan-

cial statements and relying on their own financial predictions.

FUTURE OPERATIONS

In August of 1995, the National Park Service completed a

new General Management Plan for Grand Canyon National

Park. This plan outlines significant changes that will im-

prove and enhance visitors’ enjoyment as well as their under-

standing of this spectacular environment. Such changes are

both physical and philosophical. During the term of this con-

tract, some of these changes will be implemented, and the

concessioner’s operations will be affected accordingly.

¢ Day visitors will enter and move about the Grand Canyon

Village Area by means of new transportation and trail

systems. Private vehicles will continue to be permitted

on East Rim Drive and at Desert View.

tion service change is January |, 2004. .

powerhouse area of the historic South Rim village. The

concessioner will vacate its currently occupied historic

structures in the heart of Grand Canyon Village, and will

renovate and relocate its warehousing and maintenance

functions to a complex that presently houses the park’s

.NPS Maintenance shops, after the NPS completes con-

struction of its new maintenance buildings (est. comple-

tion date 12/31/02). At that time, the fueling tanks

currently owned by the NPS and used by the conces-

sioner will be assigned to the concessioner.

At any time after December 31, 2004, the National Park Ser-

vice may withdraw transportation and kennel services from

this Contract and compete them as a separate business oppor-

tunity.

Copies of the Grand Canyon General Management Plan are

available on the Internet at http://www.nps.gov/grca/gmp/-

index.htm.

In addition, in its reservation system, the concessioner will

implement a toll-free number. All reservation services,

group sales and marketing operations will be located outside

the park.

Building and Improvement Program

Particular projects are identified in Section 9 of the Draft

Contract, including the timing and anticipated expenditures

of each project. Each project is subject to environmental and

cultural compliance.

Some facilities changes at the South Rim called for by the

General Management Plan will also be realized through the

requirements listed in Section 9 of this Draft Contract.

Project costs

The projects identified here in general terms represent the

greater part of an Improvement Program to be carried out by

the concessioner and estimated by the NPS to total approxi-

mately $8.5 million. Each Offeror should make its own de-

terminations as to the probable cost of implementing the

construction requirements identified in the Improvement Pro-

gram in Section 9 of the Draft Contract.

The estimate prepared by the NPS is a “Class C” conceptual

cost estimate based on square foot costs of similar construc-

tion, or on identifiable known unit costs of similar construc-

tion items. Class C estimates are usually prepared before a

fully defined scope of work has been developed. They con-

sider such factors as job location, unusual site conditions,

sources of materials and supplies, and the availability and

skills of local labor pools. Class C estimates are used to es-

tablish a logical expectation of the costs associated with a

future project by assessing the known costs of similar past

projects.

Transportation

This Draft Contract prohibits the practice of using park lands

as a base of operations for transportation services conducted

outside the park, as was done in the past.

Taxi service will be permitted to serve Tusayan as well as

areas within the South Rim.

Environmental Management

The new concessioner will develop, document, implement,

and comply fully with a comprehensive written Environ-

mental Management Program (EMP) to achieve Environ-

mental Management Objectives. The initial EMP shall be

developed and submitted to the Director for approval within

sixty days of the effective date of the contract. A proposed

updated EMP will be submitted for approval annually. (See

Draft Contract, Section 6).

The annual EMP will describe how the concessioner will

comply with the EMP and how the concessioner will self—

assess its performance under the EMP. The self-assessment

should ensure the concessioner’s conformance with the Envi-

ronmental Management Objectives and measure performance

against environmental goals and targets. The EMP shall also

describe procedures to be taken by the concessioner to cor-

rect any deficiencies identified by the self-assessment.

Utilities

Water, sewage disposal, solid waste removal and recycling

are provided by the park. The NPS charges the concessioner

for these services. All other utilities are provided directly by

utility companies.

PROPERTY OWNERSHIP AND PURCHASE

The existing concessioner has, under the terms of its existing

contract, certain rights to monetary compensation in the

event it is not selected as the new concessioner for the new

concession contract.

This compensation relates to possessory interest in real prop-

erty improvements and to personal property of the existing

concessioner, or both. The compensation for possessory in-

terest has been fixed at $165,000,000 through binding

arbitration.

It is the obligation of any Offeror selected as a new conces-

sioner to pay the $165,000,000 possessory interest compen-

sation to the existing concessioner in accordance with the

terms of the existing contract. The existing contract is found

in Appendix 9. In light of the fact that the value of the pos-

sessory interest has been determined through binding arbitra-

tion, the new concessioner will be required to compensate the

existing concessioner for its possessory interest no later than

December 31, 2001. |

Personal Property

Any Offeror that is selected as the new concessioner is

obliged to purchase certain personal property of the current

concessioner, under the provisions of the existing contract,

which is included in Appendix 9.

Offerors are solely responsible for ascertaining the personal

property which must be purchased and its condition. The

purchase price of personal property must be estimated by the

offeror. The fact that the final purchase price may be greater

than estimated by an offeror will not be grounds for adjust-

ment of the terms of the contract or other relief to the new

concessioner.

Estimate of Value

The value of the existing concessioner’s personal property

and equipment is estimated by the NPS to be approximately

$9,000,000.

EFFECTIVE DATE OF NEW CONTRACT

The effective date of the new contract will be January |,

2002.

FRANCHISE FEES

The minimum franchise fee for the new contract is 3.8% of

annual gross receipts. However, Offerors may propose a

higher minimum franchise fee in accordance with the terms

of the prospectus.

SITE VISITS

If an on-site tour of the facilities is desired, it will be con-

ducted on May 15, 2001. Such requests should be directed to

Ms. Laura Shearin no later than May 1, 2001: (520) 226-

0169.

Refer to Appendix | for an explanation of the NPS conces-

sion management system and practices.

THE PARK AREA AND ITS MISSION

South Rim Accommodations, Facilities & Services

CC-GRCA001-01

DESCRIPTION OF PARK

Grand Canyon National Park is located in the northwest cor-

ner of the State of Arizona in Coconino County, encompass-

ing approximately 1,218,375 acres of public land on the

southern end of the Colorado Plateau. Its scenic vistas attract

visitors from all over the world.

A 277-mile stretch of the Colorado River runs through the

park. The exposed geologic strata of the canyon rise over a

mile above the river, providing one of the world’s most com-

plete records of geological history.

The elevational diversity of Grand Canyon results in signifi-

cant climatic variations and biological diversity, reflected in

life zones ranging from the arid lower Sonoran Desert to

those typical of forested regions in Canada. Steep canyon

walls admit limited sunshine to the canyon’s floor during the

winter, giving cold nights and cool days. Spring and fall fea-

ture cool nights and mild days. Summer nights are warm,

while days are hot, usually well over 100 degrees Fahrenheit.

Except for seasonal thunderstorms, usually in July and Au-

gust, the area is very dry. Snowfall is occasionally recorded

in the winter. |

The South Rim of the Grand Canyon attracts visitors year-

round, although most visitation occurs from March to Octo-

ber. Visitors to the Grand Canyon come from all over the

world, with substantial numbers of visitors from Japan, Ger-

many, and France.

Almost five million recreational visits are recorded in the

park each year, primarily on the South Rim. The public has

traditionally used the park for sightseeing, hiking, river raft-

ing, camping, touring, and general recreation. The scientific

community has also utilized the park extensively for many

fields of research.

In recognition of its globally significant values, Grand Can-

yon National Park has been designated as a World Heritage

Site.

Park Headquarters Location

Park Headquarters is located in the community of Grand

Canyon, Arizona, on the park’s South Rim, 60 miles west of

Cameron, Arizona, via Arizona State Route 64; 60 miles

north of Williams, Arizona, via Arizona State Route 64; and

85 miles northwest of Flagstaff, Arizona, via U.S. Highway

180.

Legislated Purpose and Significance of Park

On January 11, 1908, President Theodore Roosevelt reserved

land in the Grand Canyon of Arizona as the Grand Canyon

National Monument by presidential proclamation. In his

proclamation, President Roosevelt stated that the Grand Can-

yon of Arizona “is an object of unusual scientific interest,

being the greatest eroded canyon in the United States, and it

appears that the public interest would be promoted by reserv-

ing it as a National Monument” (Proclamation No. 794).

On February 26, 1919, Congress dedicated and set apart

Grand Canyon National Park “as a public park for the benefit

and enjoyment of the people” (Grand Canyon National Park

Establishment Act, 40 Stat 1175).

Over the years the park has been enlarged and its boundaries

revised, most recently on January 3, 1975, when Congress

recognized “that the entire Grand Canywn, from the mouth of

the Paria River to the Grand Wash Cliffs, including tributary

side canyons and surrounding plateaus, is a natural feature of

national and international significance” (Grand Canyon Na-

tional Park Enlargement Act, Public Law 93-620). In this act,

Congress also recognized the need for “further protection and

interpretation of the Grand Canyon in accordance with its

true significance.”

These legislative statements, in addition to the NPS Organic

Act, as amended, effectively provide the foundation upon

which park management is based. Management seeks to pro-

tect the natural and cultural resources of the park, while pro-

viding for “the benefit and enjoyment of the people” through

resource-based interpretive programs and appropriate public

and concessions facilities.

Compliance with Federal, State, and Local Laws and

Park Jurisdiction

Grand Canyon National Park operates under the jurisdiction

of the federal government. The park has concurrent jurisdic-

tion with the State of Arizona.

Law enforcement is conducted by National Park Service

(NPS) Rangers holding federal law enforcement commis-

sions. These officers enforce Federal and state laws through

the Act of June 25, 1948, the Assimilative Crimes Act.

County and state law enforcement officers enter the park to

enforce local and state law. The park has a memorandum of

understanding, describing these law enforcement and mutual

aid relationships, with the neighboring police department

Public health codes are prescribed by the United States Pub-

lic Health Service (USPHS), and inspections are conducted

in accordance with those codes. The USPHS inspects and

supervises the operation of the park’s water supply and sew-

age disposal systems.

National building codes apply to all construction and reha-

bilitation projects, except where state code is more stringent,

in which case state code is applied. Construction may be un-

dertaken only after the NPS issues a letter or permit to pro-

ceed and approves the plans involved.

Although operations are conducted on federal property, the

concessioner is subject to state and local laws and ordinances

in the same manner as if it operated outside of the federal

holding. Business permits normally required must be se-

~ cured, and taxes normally payable must be paid.

Fire Protection

Fire protection is provided to in-park structures by a volun-

teer fire department composed of NPS, concessioner and co-

operator members under NPS direction. Amfac Resorts, LLC

has maintained its own fire engine as part of that system.

Grand Canyon National Park and Amfac Resorts, LLC work

together to provide fire suppression to park structures.

Park Management Structure

Grand Canyon National Park is administered by its Superin-

tendent, who is assisted by a staff of approximately 325 per-

manent and 100 seasonal personnel.

Many issues can be reviewed and decided at the park level;

others, however, require review and/or approval at the re-

gional or Washington level, and some require a process of

public review prior to decision.

The Superintendent manages the total park operation, includ-

ing concession operations. The Superintendent carries out the

policies and directives of the NPS, including management of

concessioners. Through NPS representatives, the Superinten-

dent reviews, supervises, and coordinates concession activi-

ties related to Grand Canyon National Park.

Monitoring concession contract compliance includes over-

sight of all aspects of the concessioner’s activities, including,

without limitation, evaluating all concession operations and

services, reviewing business operations, reviewing and au-

thorizing all rates and operating seasons/hours, improve-

ments to facilities, and construction.

The Management Assistant coordinates legislative and con-

gressional affairs, partnerships and public affairs. The Public

Information Officer, who works for the Management Assis-

tant, coordinates public affairs, special events, VIP visits, in-

formational briefings, and directs the park’s commercial

filming program. Both coordinate activities directly with the

Concessioner.

The Chief, Concessions Program Management, (Chief) coor-

dinates the functions of other NPS divisions relating to con-

cession operations. The Chief makes recommendations on all

aspects of the Concessioner’s operation to the Superinten-

dent. The Chief ensures necessary evaluations and inspec-

tions are performed, including those required by the United

States Public Health Service (USPHS), Park Risk Manage-

ment Officer, Structural Fire Program, Environmental Man-

agement Program and the Concessioner Review Program.

The Chief ensures all Concessioner rates are approved based

upon current comparability studies or applicable guidelines.

The Chief acts as liaison between the Concessioner and Su-

perintendent.

To support the Chief, Concessions Program Management,

Concessions Management Specialists review and coordinate

the Concessioner’s day-to-day activities. They develop pro-

spectuses and contracts. They review and evaluate opera-

tional and maintenance activities; rate, service, and schedule

changes; equal employment opportunity and affirmative ac-

tion plans; advertisements; construction proposals; environ-

mental management; annual financial reports; insurance

coverage; and any other contract requirements.

The Park Sanitarian monitors food and beverage services,

grocery stores, solid waste disposal, water, and waste water

systems to ensure adherence to all applicable public health

standards.

The Deputy Superintendent supervises and manages the

functions of all divisions except concessions, as they relate to

the overall park operation.

The Park Risk Management Officer monitors the Conces-

sioner’s Risk Management Program to ensure it meets all ap-

plicable standards, and conducts an annual review of the Risk

Management program.

The Chief Ranger initiates, reviews, supervises, and coordi-

nates the activities of personnel who provide visitor protec-

tion functions.

District Rangers and Branch Chiefs serve as the direct line of

communication to the Concessioner on matters related to fire

management, law enforcement, risk management, prescribed

fire, search and rescue, emergency medical services and re-

source protection. Division personnel may assist with con-.

cession operational evaluations and critical item follow-ups.

The Chief of Interpretation acts on behalf of the Superinten-

dent in matters pertaining to interpretation and environmental

_education. The Interpretive Division works with the Conces-

sions Management Division to evaluate/monitor and provide

training as appropriate to Concessioner interpretive activities.

The Chief of Maintenance and Engineering acts on behalf of

the Superintendent in matters pertaining to maintenance and

supervises the activities of facility managers. The Chief of

Maintenance acts on behalf of the Superintendent in matters

pertaining to compliance with Applicable Environmental

Laws.

Facility Managers and Maintenance Supervisors provide day-

to-day supervision over all maintenance activities and opera-

tions, including utilities and hazard tree mitigation. They

serve as the direct line of communications to the Conces-

sioner on routine maintenance matters.

The Park Architect works directly with the Concessioner on

historic preservation, rehabilitation of historic structures and

all other construction/design/compliance matters in the park.

The Director of the Science Center acts on behalf of the Su-

perintendent in all matters pertaining to natural and cultural

resources management such as air quality monitoring,

vegetation management, fish and wildlife management, etc.

The Park Compliance Officer works directly with the Con-

cessioner to ensure compliance with natural, cultural and re-

source protection requirements.

The Park Curator serves as direct line of communication to

the Concessioner about care, treatment and preservation of

historic furnishings, decorative arts, etc.

The Chief of Administration acts on behalf of the Superin-

tendent in matters related to fiscal management associated

with the Concessioner activities, including billing for pay-

ment of franchise fees, utilities, lease fees, quarters rental,

and personal services provided by the NPS to the Conces-

sioner.

The Implementation Team Manager acts on behalf of the Su-

perintendent in all matters pertaining to implementation of

the General Management Plan, which includes scheduling,

planning, review of site plans, design, construction, razing of

buildings and restoration. The Team Manager has direct

communication with the Concessioner on these matters.

Park Interpretive Themes and Goals

The mission of interpretation is to increase visitor under-

standing and appreciation of the significance of park re-

sources. Interpretive services provide opportunities for

people to forge their own intellectual and emotional connec-

tions to the ideas and meanings inherent in the resources of

the park.

It is the goal of interpretation that park visitors and the gen-

eral public understand and appreciate the preservation of

parks and their resources for this and future generations.

Primary Parkwide Interpretive Themes for

Grand Canyon National Park

A. The immense and colorful Grand Canyon is valued

worldwide as one of Earth’s most powerful and inspiring

scenic landscapes, offering people enriching opportuni-

ties to explore and experience its wild beauty in both vast

and intimate spaces.

B. Water is the lifeblood of Grand Canyon—a force of ero-

sion, a sustainer of scarce riparian habitat in a desert en-

vironment, a spiritual element for native peoples, a

provider of recreation, and a central factor in the explora-

tion, development, and politics of the American West.

C. The Colorado River and erosional forces sculpted the

southern edge of the Colorado Plateau to form the Grand

Canyon, revealing a beautiful sequence of rock layers

that serve as windows into time.

D. Extreme changes in elevation, exposure, and climate in

the Grand Canyon support a remarkable range of biotic

communities in unusual proximity; a relatively undis-

turbed ecosystem that allows natural processes to con-

tinue, providing sanctuary for present and future life.

E. Grand Canyon remains a homeland and a sacred place to

a number of American Indian cultures, a point of emer-

gence to some, offering us an opportunity to consider the

powerful and spiritual ties between people and place.

F. Grand Canyon has sustained people materially and spiri-

tually for thousands of years—wider recognition of its

value led to its designation as a national park and world

heritage site; however, continuing threats to its preserva-

tion generate dialogue about our need and responsibility

to conserve our local and global environment.

PARK PLANNING DOCUMENTS AND PLANNED

IMPROVEMENTS.

Recognizing that increasing visitation was producing strains

on park infrastructure and resources, the National Park Ser-

vice finalized a General Management Plan for Grand Canyon

National Park in 1995. This plan is available in its entirety at

http://www.nps.gov/grca/gmp/index.htm.

In its objectives for Grand Canyon National Park, the Gen-

eral Management Plan listed the following as desired condi-

tions to be achieved:

International Significance

tage site with natural and cultural resources of national

and international significance.

Natural and Cultural Resources

° Preserve, protect, and interpret the park’s natural and

scenic resources and values, and its ecological processes.

(archeological, ethnographic, architectural, and historic

resources, trails, and cultural landscapes) for the benefit

of present and future generations.

ues such as visibility.

protect the park’s resources and values.

composition within the park, consistent with natural eco-

system processes.

¢ To the maximum extent possible, restore altered ecosys-

tems to their natural conditions. In managing naturalized

ecosystems, ensure the preservation of native components

through the active management of nonnative components

and processes.

Manage ecosystems to preserve critical processes and

linkages that ensure the preservation of rare, endemic,

and specially protected (threatened/endangered) plant and

animal species.

Protect the natural quiet and solitude of the park, and

mitigate or eliminate the effects of activities causing ex-

cessive or unnecessary noise in, over, or adjacent to the

park.

Preserve natural spring and stream flows and water qual-

ity. Withdraw only the minimum water necessary to meet

park purposes. To the maximum extent feasible, strive to

meet increases in water demand by conserving and reus-

ing water.

Provide opportunities for scientific study and research

focused on the Grand Canyon, consistent with resource

protection and park purposes.

Inventory, monitor, and maintain data on park natural and

cultural resources and values, and utilize this information

in the most effective ways possible to facilitate park

management decisions to better preserve the park.

Clearly delineate and maintain the park boundary to pro-

tect park resources and values.

Identify and evaluate all cultural properties within the

park for inclusion on the National Register of Historic

Places.

Collect ethnographic data and develop ethnohistories for

the Havasupai, Hopi, Hualapai, Navajo, Southern Paiute,

and Zuni peoples concerning their associations with the

Grand Canyon, as appropriate, in order to preserve, pro-

tect, and interpret park resources and values important to

diverse American Indian cultures, including significant,

Wilderness and Wild River Management

Manage areas meeting the criteria for wilderness designa-

tion as wilderness. Actively pursue the designation of

these lands as part of the national wilderness preservation

system.

Manage the Colorado River corridor through Grand Can-

yon National Park to protect and preserve the resource in

a wild and primitive condition. Actively pursue the des-

ignation of eligible segments of the Colorado River and

its tributaries as part of the national wild and scenic rivers

system.

Visitor Experience

Provide a diverse range of quality visitor experiences, as

appropriate, based on the resources and values of the

Grand Canyon, compatible with the protection of those

resources and values.

Provide access that is appropriate and consistent with the

character and nature of each landscape unit and the de-

sired visitor experience.

Consistent with park purposes and the characteristics of

each landscape unit, preserve and protect the maximum

opportunities in every landscape unit of the park for visi-

tors to experience the solitude, natural conditions, primi-

tiveness, remoteness, and inspirational value of the Grand

Canyon.

Provide equal access to programs, activities, experiences,

and recreational opportunities for individuals with dis-

abilities, as appropriate and consistent with the levels of

development and inherent levels of access in areas within

the park.

Provide a wide range of interpretive opportunities and

information services to best assist, inform, educate, and

challenge visitors.

to preserve and protect the world they live in, including

but not limited to the park.

transportation system for visitors, employees, and resi-

dents, consistent with management zoning and resource

considerations. Emphasize nonmotorized modes of trans-

portation wherever feasible.

visitor experience while minimizing crowding, conflicts,

and resource impacts.

necessary and appropriate, in or adjacent to areas dedi-

cated to those uses or in appropriate disturbed areas.

Facility Design

* Consistent with its purpose, strive to make Grand Canyon

National Park a model of excellence in sustainable design

and management through such means as energy effi-

ciency, conservation, compatibility with historic setting

and architecture, recycling, accessibility, and the use of

alternative energy sources.

¢ Encourage appropriate use and adaptive reuse of historic

structures, while preserving historic integrity.

¢ Ensure that development and facilities within the park are

necessary for park purposes.

° Design high-quality facilities that exemplify visual con-

sistency and appropriateness.

¢ Ensure that park developments and operations do not ad-

versely affect park resources and environments, except

where absolutely necessary to provide reasonable visitor

access and experiences.

Regional Issues

° Understand, assess, and consider the effects of park deci-

sions Outside the park as well as inside.

can Indians in planning, developing, and managing lands

adjoining the park in a mutually compatible manner.

age compatible, aesthetic, and planned development and

recreational opportunities outside park boundaries, and to

provide information, orientation, and services to visitors.

boundaries of the park, including the protection of park

resources and values from external influences.

South Rim Management Objectives

The South Rim is considered to be bounded on the west by

Hermits Rest, on the east by Desert View, on the north by the

canyon rim, and on the south by the park boundary. The fol-

lowing objectives for the South Rim are in addition to the

overall park objectives.

Visitor Experience

_ @ Identify and develop an appropriate range of visitor ex-

periences, opportunities, and access that will accommo-

date a variety of visitor expectations, abilities, and

commitment levels.

views and trails, and interpretation and information, rec-

ognizing that these are the most important elements of the

visitor experience on the South Rim.

® Maintain the South Rim from Hermits Rest to Desert

View as the focus for the majority of visitor use in the

park, including major visitor facilities and accommoda-

tions.

Cultural Resources

as a strong component of the interpretive program, in-

cluding the interpretation of American Indian cultures.

Development

and public transportation to provide convenient and effi-

cient movement of visitors, employees, and residents

within Grand Canyon Village and between major points

of interest.

¢ Maintain and enhance the meandering, rural character of

West Rim and East Rim Drives, including the feeling that

one is removed from the developments of Grand Canyon

Village and Desert View. Maintain the existing large un-

disturbed areas along West Rim Drive.

Significant Changes Proposed in the General Manage-

ment Plan

Substantial changes in the transportation system were pro-

posed. Although vehicle restrictions are planned, no limit on

the number of visitors is anticipated for the life of the Gen-

eral Management Plan (to the year 2010).

The General Management Plan proposes the following

changes for the South Rim of Grand Canyon National Park:

¢ A transit system will provide transportation for all day

visitors to the village area of the South Rim of the Grand

Canyon within the term of this contract. Overnight visi-

tors to lodges on the South Rim (except for Yavapai) will

park at the Maswik Transportation Center and be shuttled

to their lodges. Yavapai overnight visitors will park in the

Yavapai area.

¢ A new visitor information center—the Canyon View In-

formation Plaza—opened in the fall of 2000, and will be

a primary hub for the transit system.

trail system for pedestrians and bicyclists is proposed

from Hermits Rest to Desert View and from the Canyon

View Information Plaza to Tusayan.

¢ The National Park Service will build a new warehouse

and maintenance facility for its operations. This project

has an estimated completion date of 11/1/02. Administra-

tive and maintenance facilities for the South Rim conces-

sioner will then be relocated to the current National Park

Service facilities.

historic district, using the historic powerhouse, mule

barn, laundry, and other buildings. Five dormitories lo-

cated in the Village area may be converted to economy

lodging.

PARK MANAGEMENT OBJECTIVES FOR CONCES-

SION SERVICES

The need for commercial visitor services in Grand Canyon

National Park is based on objectives for visitor use described

in law, planning documents that exist for the park, and the

judgment of management considering the way the park is

currently used and the present objectives of the NPS.

The NPS has determined that the facilities and services that

are called for in this Prospectus are necessary and appropriate

to the purposes of Grand Canyon National Park.

UNITED STATES DEPARTMENT OF THE INTERIOR

NATIONAL PARK SERVICE

Grand Canyon National Park

South Rim

Accommodations, Facilities and Services

CONCESSION CONTRACT

NUMBER CC-GRCA001-01

[Name of Concessioner]

[Address, including email address and phone number]

Doing Business As

Covering the Period

January 1, 2002 through December 31, 2011

CONCESSION CONTRACT

TABLE OF CONTENTS

IDENTIFICATION OF THE PARTIES

SEC.1 TERM OF CONTRACT

SEC.2 DEFINITIONS

SEC.3 SERVICES AND OPERATIONS

Required and Authorized Visitor Services

Operation and Quality of Operation

Operating Plan

Merchandise and Services

Rates

Impartiality as to Rates and Services

me aoe

SEC. 4.

SEC. 5.

SEC. 6.

SEC. 7

SEC. 8.

CONCESSIONER PERSONNEL

a. Employees

b. Employee Housing and Recreation

LEGAL, REGULATORY, AND POLICY

COMPLIANCE

a. Legal, Regulatory, and Policy Compliance

b. Notice

c. How and Where to Send Notice

ENVIRONMENTAL AND CULTURAL PRO-

TECTION

a. Environmental Management Objectives

b. Environmental Management Program

c. Environmental Management Measurement

d. Environmental Data, Reports, Notifications,

and Approvals

e. Corrective Action

f. Indemnification and Cost Recovery for Con-

cessioner Environmental Activities

g. Weed and Pest Management

h. Protection of Cultural and Archaeological Re-

sources

INTERPRETATION OF AREA RESOURCES

a. Concessioner Obligations

b. Director Review of Content

CONCESSION FACILITIES USED IN OP-

ERATION BY CONCESSIONER

Assignment of Concession Facilities

Concession Facilities Withdrawals

Effect of Withdrawal

Right of Entry

Personal Property and Historic Personal Prop-

erty

Condition of Concession Facilities

Utilities Provided by the Director

Utilities Not Provided by the Director

eno op

pao

SEC. 9.

SEC. 10.

SEC. 11.

SEC. 12.

SEC. 13

SEC. 14.

SEC. 15

CONSTRUCTION OR INSTALLATION OF

REAL PROPERTY IMPROVEMENTS

a. Construction of Real Property Improvements

b. Removal of Real Property Improvements

c. Leasehold Surrender Interest

d. Concession Facilities Improvement Program

MAINTENANCE

a. Maintenance Obligation

b. Maintenance Plan

c. Repair and Maintenance Reserve

d. General Maintenance Reserve

FEES

a. Franchise Fee

b. Payments Due

c. Interest

d. Adjustment of Franchise Fee

INDEMNIFICATION AND INSURANCE

a. Indemnification

b. Insurance in General

c. Commercial Public Liability

d. Property Insurance

BONDS AND LIENS

a. Bonds

b. Lien

ACCOUNTING RECORDS AND REPORTS

a. Accounting System

b. Annual Financial Report

c. Other Financial Reports

OTHER REPORTING REQUIREMENTS

a. Insurance Certification

b. Environmental Reporting

c. Miscellaneous Reports and Data.

SEC. 16.

SEC. 17.

SEC. 18.

SEC. 19.

SUSPENSION, TERMINATION, OR EXPI-

RATION

Suspension

Termination

Notice of Bankruptcy or Insolvency

Requirements in the Event of Termination or

Expiration

COMPENSATION

a. Just Compensation

b. Compensation for Contract Expiration or

Termination

c. Procedures for Establishing the Value of a

Leasehold Surrender Interest

d. Compensation for Personal Property

e. Compensation for Historic Personal Property

ASSIGNMENT, SALE OR ENCUMBRANCE

OF INTERESTS

GENERAL PROVISIONS

ar oP

EXHIBITS

EXHIBIT A: Leasehold Surrender Interest

EXHIBIT B: Operating Plan

EXHIBIT C: Nondiscrimination.

EXHIBIT D: Assigned Land, Real Property Improvements

EXHIBIT E: Assigned Government Personal Property and

Historic Personal Property

EXHIBIT F: Concessioner Construction, Major Rehabilita-

tion, and Repair and Maintenance Project Pro-

cedures

EXHIBIT G: Leasehold Surrender Interest

EXHIBIT H: Mainterance Plan

EXHIBIT I: Insurance Requirements

EXHIBIT J: Historic Personal Property

[CORPORATION]

THIS CONTRACT is made and entered into by and between

the United States of America, acting in this matter by the Di-

rector of the National Park Service, through the Regional Di-

rector of the Intermountain Region, (hereinafter referred to as

the “Director”), and , a corporation or-

ganized and existing under the laws of the State

of ( hereinafter referred to as the “Conces-

sioner”):

[PARTNERSHIP]

THIS CONTRACT is made and entered into by and between

the United States of America, acting in this matter by the Di-

rector of the National Park Service, through the Regional Di-

rector of the Intermountain Region, hereinafter referred to as

the “Director”, and __, a partnership organized

under the laws of the State of , hereinafter re-

ferred to as the “Concessioner”:

[SOLE PROPRIETORSHIP]

THIS CONTRACT made and entered into by and between

the United States of America, acting in this matter by the Di-

rector of the National Park Service, through the Regional Di-

rector of the Intermountain Region, hereinafter referred to as

the “Director,” and, , an individual, doing

business as __, hereinafter

referred to as the “Concessioner”:

WITNESSET H:

THAT WHEREAS, Grand Canyon National Park is admin-

istered by the Director as a unit of the National Park System

to conserve the scenery and the natural and historic objects

and the wildlife therein, and to provide for the public enjoy-

ment of the same in such manner as will leave such Area un-

impaired for the enjoyment of future generations; and

WHEREAS, to accomplish these purposes, the Director has

determined that certain visitor services are necessary and ap-

propriate for the public use and enjoyment of the Area and

should be provided for the public visiting the Area; and

WHEREAS, the Director desires the Concessioner to estab-

lish and operate these visitor services at reasonable rates un-

der the supervision and regulation of the Director; and

WHEREAS, the Director desires the Concessioner to con-

duct these visitor services in a manner that demonstrates

sound environmental management, stewardship, and leader-

ship;

NOW, THEREFORE, pursuant to the authority contained

in the Acts of August 25, 1916 (16 U.S.C. 1, 2-4), and No-

vember 13, 1998 (Public Law 105-391), and other laws that

supplement and amend the Acts, the Director and the Con-

cessioner agree as follows:

SEC. 1. TERM OF CONTRACT

This Concession Contract No. CC-GRCA001-01 (“CON-

TRACT”) shall be effective as of January 1, 2002, and shall

be for the term of 10 (ten) years until its expiration on De-

cember 31, 2011.

SEC. 2. DEFINITIONS

The following terms used in this CONTRACT will have the

following meanings, which apply to both the singular and the

plural forms of the defined terms:

(a) “Applicable Laws” means the laws of Congress govern-

ing the Area, including, but not limited to, the rules, regula-

tions, requirements and policies promulgated under those

laws (e.g., 36 CFR Part 51), whether now in force, or

amended, enacted or promulgated in the future, including,

without limitation, Federal, state and local laws, rules, regu-

lations, requirements and policies governing nondiscrimina-

tion, protection of the environment and protection of public

health and safety.

(b) “Area” means the property within the boundaries of

Grand Canyon National Park.

and practices that apply the most current and advanced

means and technologies available to the Concessioner to un-

dertake-and maintain a superior level of environmental per-

formance reasonable in light of the circumstances of the

operations conducted under this CONTRACT. BMPs are ex-

pected to change from time to time as technology evolves

with a goal of sustainability of the Concessioner’s operations.

Sustainability of operations refers to operations that have a

restorative or net positive impact on the environment.

(d) “Capital Improvement” shall have the meaning set forth

in Exhibit A to this CONTRACT.

(e) “Concession Facilities” shall mean all Area lands as-

signed to the Concessioner under this CONTRACT and all

Real Property improvements assigned to or constructed by

the Concessioner under this CONTRACT. The United States

retains title and ownership to all Concession Facilities.

(f) “Days” shall mean calendar days.

(g) “Director” means the Director of the National Park Ser-

vice, acting on behalf of the Secretary of the Interior and the

United States, and his duly authorized representatives.

(h) “Exhibit” or “Exhibits” shall the various exhibits,

which are attached to this CONTRACT, each of which is

hereby made a part of this CONTRACT.

(i) “Gross receipts” means the total amount received or real-

ized by, or accruing to, the Concessioner from all sales for

cash or credit, of services, accommodations, materials, and

other merchandise made pursuant to the nights granted by this

CONTRACT, including gross receipts of subconcessioners

as herein defined, commissions earned on contracts or

agreements with other persons or companies operating in the

Area, and gross receipts earned from electronic media sales,

but excluding:

(1) imtracompany earnings on account of charges to

other departments of the operation (such as laundry);

(2) charges for employees’ meals, lodgings, and trans-

portation;

(3) cash discounts on purchases;

(4) cash discounts on sales;

(5) returned sales and allowances;

(6) interest on money loaned or in bank accounts;

(7) imcome from investments;

(8) 3 from subsidiary companies outside of the

Area;

(9) sale of property other than that purchased in the

regular course of business for the purpose of resale;

(10) sales and excise taxes that are added as separate

charges to sales prices, gasoline taxes, fishing li-

cense fees, and postage stamps, provided that the

amount excluded shall not exceed the amount actu-

ally due or paid government agencies;

(11) receipts from the sale of handicrafts that have been

approved for sale by the Director as constituting au-

thentic American Indian, Alaskan Native, Native

Samoan, or Native Hawaiian handicrafts.

All monies paid into coin operated devices, except tele-

phones, whether provided by the Concessioner or by others,

shall be included in gross receipts. However, only revenues

actually received by the Concessioner from coin-operated

telephones shall be included in gross receipts. All revenues

received from charges for in-room telephone or computer

access shall be included in gross receipts.

(j) “Gross receipts of subconcessioners” means the total

amount received or realized by, or accruing to, subconces-

sioners from all sources, as a result of the exercise of the

rights conferred by a subconcession contract. A subconces-

sioner will report all of its gross receipts to the Concessioner

without allowances, exclusions, or deductions of any kind or

nature.

(k) “Leasehold Surrender Interest” shall have the meaning

set forth in Exhibit A to this CONTRACT.

(1) “Leasehold Surrender Interest Value” or the “value” of a

Leasehold Surrender Interest shall have the meaning set forth

in Exhibit A to this CONTRACT.

(m) “Major Rehabilitation” shall have the meaning set forth

in Exhibit A to this CONTRACT.

(n) “Possessory Interest” shall have the meaning set forth in

Exhibit A to this CONTRACT.

(0) “Real Property Improvements” shall have the meaning

set forth in Exhibit A to this CONTRACT.

(p) “Historic Personal Property” is certain personal property

owned by the Concessioner that is intrinsic to the historic and

cultural values of the area and related concession operations.

Some items are, in themselves, artistic, historic or cultural

artifacts.

(q) “Subconcessioner” means a third party that, with the ap-

proval of the Director, has been granted by a concessioner

rights to operate under a concession contract (or any portion

thereof), whether in consideration of a percentage of reve-

nues or otherwise.

(r) “Superintendent” means the manager of the Area.

(s) “Visitor Services” means the accommodations, facilities

and services that the Concessioner is required and/or author-

ized to provide by Section 3(a) of this CONTRACT.

SEC. 3. SERVICES AND OPERATIONS

(a) Required and Authorized Visitor Services

During the term of this Contract, the Director requires and

authorizes the Concessioner to provide the following visitor

services for the public within the Area:

(1) Required Visitor Services: The Concessioner is required

to provide the following visitor services during the term of

this Contract:

1. Qvernight Accommodations Numberof Lodging Type

Rooms

E] Tovar Hotel 78 Deluxe hotel

rooms

Kachina/Thunderbird Lodges 104 Deluxe motel

rooms

Bright Angel Complex 39 Rustic rooms

Bucky/Powell Motel

(with and without bath)

Historic cabins 35 Mid-scale cabins

Rim Cabins 15 Deluxe cabins

Maswik Complex

Maswik Lodge North 160 Mid-scale motel

rooms

Maswik Lodge South 90 Economy motel

rooms

Maswik Quad Cabins 28 Economy cabins

Yavapai Complex

Yavapai East 198 Mid-scale motel

rooms

Yavapai West 160 Economy motel

rooms

Phantom Ranch

Cabins without bath ll Rustic

Dormitories (10-person, 4 Rustic

same gender occupancy )

14 73

2. Food and Beverage Service © Hermits Rest Gift Shop

a. Food Service a oh © Lookout Studio Gift Shop

ElTovarHotel 250 BLD GourmetFine * Hopi House Gift Shop

Dining Restaurant 4. Transportation Services

—— = > aa © Scheduled Bus Tours

— © © oe * Stepon Guide Serves

Bright Angel 0 Snacks Limited Snack © 24-hour Taxi Service within South Rim and

Fountain Bar Tusayan.

~~. —_ = = — 5. Automobile Services

Yavapai Cafe- 475 B,L.D Cafeteria © Desert View Service Station

teria . . © 24-hour Tiltbed Towing Service with road-side re-

Phantom Ranch 44 — box —* pair service

, a © Locksmithing services

Desert nack Bar

sar and - ne . © 24-hour Credit Card fueling access at Desert View

Hermits Rest 0 Snacks Limited Snack , Service Station

Bar ;

6. Mule Operations

b. Lounge Service ,

e Arizona Room 20 seats Phantom Ranch Mule Rides ;

: omtaeie a and from Phantom Ranch

C. Transportation/V isitor Information Desks from the inner canyon by mule

d. Concierge Services © Showers

° Blow 9. Trailer Village

3. General Merchandise © RV campground — 70 sites

: te sete Shop oe — 10. Reservation System. In its reservation system, the con-

¢ Community Support

At any time after December 31, 2003, the National Park Ser-

vice intends to withdraw transportation and kennel services

from this Contract, upon reasonable notice to the Conces-

sioner, and compete them as a separate business opportunity.

(b) Operation and Quality of Operation

(1) The Concessioner shall provide, operate and maintain the

required and authorized visitor services and any related sup-

port facilities and services in accordance with this CON-

TRACT to such an extent and in a manner considered

satisfactory by the Director. Except for any such items that

may be provided to the Concessioner by the Director, the

Concessioner shall provide the plant, personnel, equipment,

goods, and commodities necessary for providing, operating

in accordance with this CONTRACT. The Concessioner’s

authority to provide visitor services under the terms of this

CONTRACT is non-exclusive.

0 Support Services are required:

Employee Cafeteria at Bright Angel Lodge

cooperator employees only 86 sites

cooperator employees only at Pinyon Park — 39 sites

¢ Employee Shuttle

The Director, acting through the Superintendent, shall estab-

lish and revise, as necessary, specific requirements for the

operations of the Concessioner under this CONTRACT in

the form of an Operating Plan (including, without limitation,

a risk management program, that must be adhered to by the

Concessioner). The initial Operating Plan is attached to this

CONTRACT as Exhibit B. The Director in his discretion,

after consultation with the Concessioner, may make reason-

able modifications to the initial Operating Plan that are in

furtherance of the purposes of this CONTRACT and are not

inconsistent with the terms and conditions of the main body

of this CONTRACT.

(d) Merchandise and Services

(1) The Director reserves the right to determine and control

the nature, type and quality of the visitor services described

in this CONTRACT, including, but not limited to, the nature,

type, and quality of merchandise, to be sold or provided by

the Concessioner within the Area.

(2) All promotional material, regardless of media format (i.e.

printed, electronic, broadcast media), provided to the public

by the Concessioner in connection with the services provided

under this CONTRACT must be approved in writing by the

Director prior to use. All such material will identify the Con-

cessioner as an authorized Concessioner of the National Park

Service, Department of the Interior.

(3) The Concessioner, where applicable, will develop and

implement a plan satisfactory to the Director that will ensure

that gift merchandise, if any, to be sold or provided reflects

the purpose and significance of the Area, including, but not

limited to, merchandise that reflects the conservation of the

Area’s resources or the Area’s geology, wildlife, plant life,

archaeology, local Native American culture, local ethnic cul-

ture, and historic significance.

(e) Rates

All rates and charges to the public by the Concessioner for

visitor services shall be reasonable and appropriate for the

type and quality of facilities and/or services required and/or

authorized under this CONTRACT. The Concessioner’s rates

and charges to the public must be approved by the Director in

accordance with Applicable Laws and guidelines promul-

gated by the Director from time to time.

(f) Impartiality as to Rates and Services

(1) Subject to Section (f)(2) and (f)(3), in providing visitor

services, the Concessioner must require its employees to ob-

serve a strict impartiality as to rates and services in all cir-

cumstances. The Concessioner shall comply with all

Applicable Laws relating to nondiscrimination in providing

visitor services to the public including, without limitation,

those set forth in Exhibit C.

(2) The Concessioner may grant complimentary or reduced

rates under such circumstances as are customary in busi-

nesses of the character conducted under this CONTRACT.

However, the Director reserves the nght to review and mod-

ify the Concessioner’s complimentary or reduced rate poli-

cies and practices as part of its rate approval process.

(3) The Concessioner will provide Federal employees con-

ducting official business reduced rates for lodging, essential

transportation and other specified services necessary for con-

ducting official business in accordance with guidelines estab-

lished by the Director. Complimentary or reduced rates and

charges shall otherwise not be provided to Federal employees

by the Concessioner except to the extent that they are equally

available to the general public.

SEC. 4. CONCESSIONER PERSONNEL

(a) Employees

(1) The Concessioner shall provide all personnel necessary to

provide the visitor services required and authorized by this

CONTRACT.

(2) The Concessioner shall comply with all Applicable Laws

relating to employment and employment conditions, includ-

ing, without limitation, those set forth in Exhibit C.

(3) The Concessioner shall ensure that its employees are hos-

pitable and exercise courtesy and consideration in their rela-

tions with the public. The Concessioner shall have its

employees who come in direct contact with the public, so far

as practicable, wear a uniform or badge by which they may

be identified as the employees of the Concessioner.

(4) The Concessioner shall establish pre-employment screen-

ing, hiring, training, employment, termination and other poli-

cies and procedures for the purpose of providing visitor

services through its employees in an efficient and effective

manner and for the purpose of maintaining a healthful, law

abiding, and safe working environment for its employees.

The Concessioner shall conduct appropriate background re-

views of applicants to whom an offer for employment may be

extended to assure that they conform to the hiring policies

established by the Concessioner.

(5) The Concessioner shall ensure that its employees are pro-

vided the training needed to provide quality visitor services

and to maintain up-to-date job skills.

(6) The Concessioner shall review the conduct of any of its

employees whose action or activities are considered by the

Concessioner or the Director to be inconsistent with the

proper administration of the Area and enjoyment and protec-

tion of visitors and shall take such actions as are necessary to

correct the situation.

(7) The Concessioner shall maintain, to the greatest extent

possible, a drug free environment, both in the workplace and

in any Concessioner employee housing within the Area.

(8) The Concessioner shall publis*. a statement notifying em-

ployees that the unlawful manufacture, distribution, dispens-

ing, possession, or use of a controlled substance is prohibited

in the workplace and in the Area, and specifying the actions

that will be taken against employees for violating this prohi-

bition. In addition, the Concessioner shall establish a drug-

free awareness program to inform employees about the dan-

ger of drug abuse in the workplace and the Area; the avail-

ability of drug counseling, rehabilitation and employee

assistance programs; and the Concessioner’s policy of main-

taining a drug-free environment both in the workplace and in

the Area.

(9) The Concessioner shall take appropriate personnel action,

up to and including termination or requiring satisfactory par-

ticipation in a drug abuse or rehabilitation program which is

approved by a Federal, State, or local health, law enforce-

ment or other appropriate agency, for any employee that is

found to be in violation of the prohibition on the unlawful

manufacture, distribution, dispensing, possession, or use of a

controlled substance.

(b) Employee Housing and Recreation

(1) If the Concessioner is required to provide employee hous-

ing under this CONTRACT, the Concessioner’s charges to

its employees for this housing must be reasonable.

(2) If the visitor services required and/or authorized under

this CONTRACT are located in a remote or isolated area, the

Concessioner shall provide appropriate employee recrea-

tional activities.

SEC. 5. LEGAL, REGULATORY, AND POLICY COM-

PLIANCE

(a) Legal, Regulatory and Policy Compliance

This CONTRACT, operations thereunder by the Conces-

sioner and the administration of it by the Director, shall be

subject to all Applicable Laws. The Concessioner must com-

ply with all Applicable Laws in fulfilling its obligations un-

der this CONTRACT at the Concessioner’s sole cost and

expense. Certain Applicable Laws governing protection of

the environment are further described in this CONTRACT.

Certain Applicable Laws relating to nondiscrimination in

employment and providing accessible facilities and services

to the public are further described in this CONTRACT.

(b) Notice

The Concessioner shall give the Director immediate written

notice of any violation of Applicable Laws by the Conces-

sioner, including its employees, agents or contractors, and, at

its sole cost and expense, must promptly rectify any such vio-

lation.

All notices required by this CONTRACT shall be in writing

and shall be served on the parties at the following addresses.

The mailing of a notice by registered or certified mail, return

receipt requested, shall be sufficient service. Notices sent to

the Director shall be sent to the following address:

Superintendent

Grand Canyon National Park

P.O. Box 129

Grand Canyon, AZ 86023

Attention: Chief, Concessions Management

Notices sent to the Concessioner shall be sent to the follow-

ing address:

Concessioner

Address

Attention:

SEC. 6. ENVIRONMENTAL AND CULTURAL PRO-

TECTION

(a) Environmental Management Objectives

The Concessioner shall meet the following environmental

management objectives (hereinafter “Environmental Man-

agement Objectives”) in the conduct of its operations under

this CONTRACT:

(1) The Concessioner, including its employees, agents and

contractors, shall comply with all Applicable Laws pertaining

to the protection of human health and the environment.

(2) The Concessioner shall incorporate Best Management

Practices (BMPs) in its operation, construction, maintenance,

acquisition, provision of visitor services, and other activities

under this CONTRACT.

(b) Environmental Management Program

(1) The Concessioner shall develop, document, implement,

and comply fully with, to the satisfaction of the Director, a

comprehensive written Environmental Management Program

(EMP) to achieve the Environmental Management Objec-

tives. The initial EMP shall be developed and submitted to

the Director for approval within sixty days of the effective

date of this CONTRACT. The Concessioner shall submit to

the Director for approval a proposed updated EMP annually.

(2) The EMP shall account for all activities with potential

environmental impacts conducted by the Concessioner or to

which the Concessioner contributes. The scope and complex-

ity of the EMP may vary based on the type, size and number

of Concessioner activities under this CONTRACT.

(3) The EMP shall include, without limitation, the following

elements:

(i) Policy. The EMP shall provide a clear statement of the

Concessioner’s commitment to the Environmental Manage-

ment Objectives.

(ii) Goals and Targets. The EMP shall identify environmental

goals established by the Concessioner consistent with all En-

vironmental Management Objectives. The EMP shall also

identify specific targets (i.e. measurable results and sched-

ules) to achieve these goals.

(iii) Responsibilities and Accountability. The EMP shall

identify environmental responsibilities for Concessioner em-

ployees and contractors. The EMP shall include the designa-

tion of an environmental program manager. The EMP shall

include procedures for the Concessioner to implement the

evaluation of employee and contractor performance against

these environmental responsibilities.

(iv) Documentation. The EMP shall identify plans, proce-

dures, manuals, and other documentation maintained by the

Concessioner to meet the Environmental Management Objec-

tives.

(v) Documentation Control and Information Management

System. The EMP shall describe (and implement) document

control and information management systems to maintain

knowledge of Applicable Laws and BMPs. In addition, the

EMP shall identify how the Concessioner will manage envi-

ronmental information, including without limitation, plans,

permits, certifications, reports, and correspondence.

(vi) Reporting. The EMP shall describe (and implement) a

system for reporting environmental information on a routine

and emergency basis, including providing reports to the Di-

rector under this CONTRACT.

(vii) Communication. The EMP shall describe how the envi-

ronmental policy, goals, targets, responsibilities and proce-

dures will be communicated throughout the Concessioner’s

organization.

(viii) Training. The EMP shall describe the environmental

training program for the Concessioner, including identifica-

tion of staff to be trained, training subjects, frequency of

training and how training will be documented.

(ix) Monitoring, Measurement, and Corrective Action. The

EMP shall describe how the Concessioner will comply with

the EMP and how the Concessioner will self-assess its per-

formance under the EMP, a least annually, in a manner con-

sistent with NPS protocol regarding audit of NPS operations.

The selfassessment should ensure the Concessioner’s con-

formance with the Environmental Management Objective.

and measure performance against environmental goals any

targets. The EMP shall also describe procedures to be take:,

by the Concessioner to correct any deficiencies identified by

the self-assessment.

The Concessioner shall be evaluated by the Director on it,

environmental performance under this CONTRACT, incluq_

ing, without limitation, compliance with the approved EMb

on at least an annual basis.

(d) Environmental Data, Reports, Notifications, and Ap,

provals

(1)

tor, at least annually, an inventory of Federal Occupations;

Safety and Health Administration (OSHA) designated ha,_

ardous chemicals used and stored in the Area by the Conce._

sioner. The Director may prohibit the use of any OSH,

hazardous chemical by the Concessioner in operations under

this CONTRACT. The Concessioner shall obtain the Dire.

tor’s approval prior to using any extremely hazardous sup.

stance, as defined in the Emergency Planning ag

Community Right to Know Act of 1986, in operations under

this CONTRACT. The Concessioner shall also submit to the

Director, at least annually, an inventory of all waste streaty.

generated by the Concessioner under this CONTRACT. Such,

inventory shall include any documents, reports, monitori

data, manifests, and other documentation required by Appjj-

cable Laws regarding waste streams.

(2) Reports. The Concessioner shall submit to the Direcig,

copies of all documents, reports, monitoring data, manifes;._

and other documentation required under Applicable Laws to

be submitted to regulatory agencies. The Concessioner shgjj

also submit to the Director any environmental plans for

Inventory of Hazardous Substances and Inventory of

Waste Streams. The Concessioner shall submit to the Dire.

which coordination with Area operations are necessary and

appropriate, as determined by the Director in accordance

with Applicable Laws.

(3) Notification of Releases. The Concessioner shall give the

Director immediate written notice of any discharge, release

or threatened release (as these terms are defined by Applica-

ble Laws) within or at the vicinity of the Area, (whether

solid, semi-solid, liquid or gaseous in nature) of any hazard-

ous or toxic substance, material, or waste of any kind, includ-

ing, without limitation, building materials such as asbestos,

or any contaminant, pollutant, petroleum, petroleum product

or petroleum by-product.

(4) Notice of Violation. The Cuncessioner shall give the Di-

rector in writing immediate notice of any written threatened

or actual notice of violation from other regulatory agencies of

any Applicable Law arising out of the activities of the Con-

cessioner, its agents or employees.

(5) Communication with Regulatory Agencies. The Conces-

sioner shall provide timely written advance notice to the Di-

rector of communications, including without limitation,

meetings, audits, inspections, hearings and other proceedings,

between regulatory agencies and the Concessioner related to

compliance with Applicable Laws concerning operations un-

der this CONTRACT. The Concessioner shall also provide to

the Director any written materials prepared or received by the

Concessioner in advance of or subsequent to any such com-

munications. The Concessioner shall allow the Director to

participate in any such communications. The Concessioner

shall also provide timely notice to the Director following any

unplanned communications between regulatory agencies and

the Concessioner.

(e) Corrective Action

(1) The Concessioner, at its sole cost and expense, shall

promptly control and contain any discharge, release or

threatened release, as set forth in this Section, or any threat-

ened or actual violation, as set forth in this Section, arising in

connection with the Concessioner’s operations under this

CONTRACT, including, but not limited to, payment of any

fines or penalties imposed by appropriate agencies. Follow-

ing the prompt control or containment of any release, dis-

charge or violation, the Concessioner shall take all response

actions necessary to remediate the release, discharge or viola-

tion, and to protect human health and the environment.

(2) Even if not specifically required by Applicable Laws, the

Concessioner shall comply with directives of the Director to

clean up or remove any materials, product or by-product

used, handled, stored, disposed, or transported onto or into

the Area by the Concessioner to ensure that the Area remains

in good condition.

(f) Indemnification and Cost Recovery for Concessioner

Environmental Activities

(1) The Concessioner shall indemnify the United States in

accordance with Section 12 of this CONTRACi from all

losses, claims, damages, environmental injuries, expenses,

response costs, allegations or judgments (including, without

limitation, fines and penalties) and expenses (including,

without limitation, attorneys fees and experts’ fees) arising

out of the activities of the Concessioner, its employees,

agents and contractors pursuant to this Section. Such indem-

nification shall survive termination or expiration of this

CONTRACT.

(2) If the Concessioner does not promptly contain and reme-

diate an unauthorized discharge or release arising out of the

activities of the Concessioner, its employees, agents and con-

tractors, as set forth in this Section, or correct any environ-

mental self-assessment finding of non-compliance, in full

compliance with Applicable Laws, the Director may, in its

sole discretion and after notice to the Concessioner, take any

such action consistent with Applicable Laws as the Director

deems necessary to abate, mitigate, remediate, or otherwise

respond to such release or discharge, or take corrective action

on the environmental self-assessment finding. The Conces-

sioner shall be liable for and shall pay to the Director any

costs of the Director associated with such action upon de-

mand. Nothing in this Section shall preclude the Conces-

sioner from seeking to recover costs from a responsible third

party.

(g) Weed and Pest Management

The Concessioner shall be responsible for managing weeds,

and through an integrated pest management program, harm-

ful insects, rats, mice and other pests on Concession Facili-

ties assigned to the Concessioner under this CONTRACT.

All such weed and pest management activities shall be in ac-

cordance with Applicable Laws and guidelines established by

the Director.

(h) Protection of Cultural and Archaeological Resources.

The Concessioner shall ensure that any protected sites and

archaeological resources within the Area are not disturbed or

damaged by the Concessioner, including the Concessioner’s

employees, agents and contractors, except in accordance with

Applicable Laws, and only with the prior approval of the Di-

rector. Discoveries of any archaeological resources by the

Concessioner shall be promptly reported to the Director. The

Concessioner shall cease work or other disturbance which

may impact any protected site or archaeological resource un-

til the Director grants approval, upon such terms and condi-

tions as the Director deems necessary, to continue such work

or other disturbance.

SEC. 7. INTERPRETATION OF AREA RESOURCES

(a) Concessioner Obligations

(1) The Concessioner shall provide all visitor services in a

manner that is consistent with and supportive of the interpre-

= 88

tive themes, goals and objectives of the Area as reflected in

Area planning documents, mission statements and/or inter-

pretive prospectuses.

(2) The Concessioner may assist in Area interpretation at the

request of the Director to enhance visitor enjoyment of the

Area. Any additional visitor services that may result from

this assistance must be recognized in wniting through written

amendment of Section 3 of this CONTRACT.

(3) The Concessioner is encouraged to develop interpretive

materials or means to educate visitors about environmental

programs or initiatives implemented by the Concessioner.

(b) Director Review of Content

The Concessioner must submit the proposed content of any

interpretive programs, exhibits, displays or materials, regard-

less of media format (i.e. printed, electronic, or broadcast

media), to the Director for review and approval prior to offer-

ing such programs, exhibits, displays or materials to Area

visitors.

SEC. 8. CONCESSION FACILITIES USED IN OP-

ERATION BY THE CONCESSIONER

(a) Assignment of Concession Facilities

(1) The Director hereby assigns the following Concession

Facilities to the Concessioner for the purposes of this CON-

TRACT:

(i) certarn parcels of Area land as described in Exhibit

D unoa which, among other matters, the Conces-

sioner may be authorized to construct Real Property;

and

(ii) certain Real Property improvements described in

Exhibit D in existence as of the effective date of this

CONTRACT, as may be modified from time to time

to include additional Real Property improvements

completed in accordance with the terms and condi-

tions of this CONTRACT.

(2) The Director shall from time to time amend Exhibit D to

reflect changes in Concession Facilities assigned to the Con-

cessioner, including, without limitation, amend Exhibit D to

reflect the addition of Real Property improvements com-

pleted in accordance with the terms and conditions of this

CONTRACT and to reflect the withdrawal of concession fa-

cilities as set forth below.

(b) Concession Facilities Withdrawals

The Director may withdraw all or portions of these Conces-

sion Facilities assignments at any time during the term of this

CONTRACT if:

(1) the withdrawal is necessary for the purpose of conserving,

preserving or protecting Area resources or visitor enjoyment

or safety;

(2) the operations utilizing the assigned Concession Facilities

have been terminated or suspended by the Director; or

(3) land or Real Property improvements assigned to the Con-

cessioner are no longer necessary for the concession opera-

tion.

Any permanent withdrawal of assigned Concession Facilities

which the Director or the Concessioner considers to be essen-

tial for the Concessioner to provide the visitor services re-

quired by this CONTRACT will be treated as a termination

of this CONTRACT pursuant to Section 16. The Conces-

sioner will be compensated pursuant to Section 17 for the

value of any Leasehold Surrender Interest it may have, if any,

in permanently withdrawn Concession Facilities. No other

compensation is due the Concessioner in these circum-

stances.

(d) Right of Entry

The Director shall have the right at any time to enter upon or

into the Concession Facilities assigned to the Concessioner

under this CONTRACT for any purpose he may deem neces-

sary for the administration of the Area.

(e) Personal Property

Concessioner shall provide all personal a including

without limitation removable equipment, furniture and

goods, necessary for its operations under this CONTRACT,

unless such personal property is provided by the Director as

set forth in subsection (e)(3).

The Concessioner will provide certain existing —e of

historic or other significance, as described in Exhibit J. This

Historic Personal Property is intrinsic to the historic and cul-

tural values of the Area, and may include artistic, historic or

cultural artifacts. The Concessioner shall be responsible for

maintaining this Historic Personal Property as necessary to

keep it in service, available to the public, and in good and

operable condition. At the expiration or other termination of

this contract, such Historic Personal Property shall be trans-

ferred to the successor concessioner, as designated by the Di-

rector, upon payment of its book value. In the event any of

the items listed in Exhibit J are determined to be part of the

realty, they will be transferred to a successor concessioner as

part of the realty in accordance with Exhibit A to this CON-

TRACT.

(3) Personal Property Provided by the Government. The Di-

rector may provide certain items of government personal

property, including without limitation removable equipment,

furniture and goods, for the Concessioner’s use in the per-

formance of this CONTRACT. The Director hereby assigns

government personal property listed in Exhibit E to the Con-

cessioner as of the effective date of this CONTRACT. This

Exhibit E will be modified from time to time by the Director

as items may be withdrawn or additional items added. The

Concessioner shall be accountable to the Director for the

government personal property assigned to it and shall be re-

sponsible for maintaining the property as necessary to keep it

in good and operable condition. If the property ceases to be

serviceable, it shall be transferred to the Director for disposi-

tion.

(f) Condition of Concession Facilities

The Concessioner has inspected the Concession Facilities

and any assigned government personal property, is thor-

oughly acquainted with their condition, and accepts the Con-

cession Facilities, and any assigned government personal

property, “as is.”

(g) Utilities P: ovided by the Director.

The Director may provide utilities to the Concessioner for

use in connection with the operations required or authorized

hereunder when available and at rates to be determined in

accordance with Applicable Laws.

(h) Utilities not Provided by the Dire-tor

If the Director does not provide utilities to the Concessioner,

the Concessioner shall, with the written approval of the Di-

rector and under any requirements that the Director shall pre-

scribe, secure necessary utilities at its own expense from

sources outside the Area or shall install the utilities within

the Area with the written permission of the Director, subject

to the following conditions:

(1) Any water rights deemed necessary by the Concessioner

for use of water on Area or other Federal lands must be ac-

quired at the Concessioner’s expense in accordance with ap-

plicable State procedures and law. Upon expiration or

termination of this CONTRACT for any reason, the Conces-

sioner must assign these water rights to *he United States

without compensation, and these water rights will become

the property of the United States;

(2) If requested by the Director, the Concessioner must pro-

vide to the Director any utility service provided by the Con-

cessioner under this Section to such extent as will not

unreasonably restrict anticipated use by the Concessioner.

Unless otherwise agreed by the Concessioner and the Direc-

tor in writing, the rate per unit charged the Director for such

service shall be approximately the average cost per unit of

providing such service; and

(3) All appliances and machinery to be used in connection

with the privileges granted in this subsection, as well as the

plans for location and installation of such appliances and ma-

chinery, shall first be approved by the Director.

SEC. 9. CONSTRUCTION OR INSTALLATION OF

REAL PROPERTY IMPROVEMENTS

(a) Construction of Real Property Improvements

The Concessioner may construct or install upon lands as-

signed to the Concessioner under this CONTRACT only

those Real Property improvements that are determined by the

Director to be necessary and appropriate for the conduct by

the Concessioner of the visitor services required and/or au-

thorized under this CONTRACT. Construction or installation

of Real Property improvements may occur only after the

written approval by the Director of their location, plans, and

specifications. The form and content of the application and

the procedures for such approvals, as may be modified by the

Director from time to time, are set forth in Exhibit F. All

Real Property improvements constructed or installed by the

Concessioner will immediately become the property of the

United States and be considered Concession Facilities.

(b) Removal of Real Property Improvements

(1) The Concessioner may not remove, dismantle, or demol-

ish Real Property improvements in the Area without the prior

approval of the Director.

(2) Any salvage resulting from the authorized removal, sev-

erance or demolition of a Real Property improvement within

the Area shall be the property of the United States.

(3) In the event that an assigned Real Property improvement

is removed, abandoned, demolished, or substantially de-

stroyed and no other improvement is constructed on the site,

the Concessioner, at its expense, shall promptly, upon the

request of the Director, restore the site as nearly as practica-

ble to its original condition.

(1) This CONTRACT hereby provides the Concessioner,

subject to all applicable definitions, requirements and limita-

tions of this CONTRACT and Exhibit A, a Leasehold Sur-

render Interest in Capital Improvements constructed by the

Concessioner under the terms of this CONTRACT, includ-

ing, but not limited to, those Capital Improvements con-

structed as part of the Concession Facilities Improvement

Program and those Capital Improvements which result from

the Major Rehabilitation of an existing Real Property im-

provement. Upon completion of a Major Rehabilitation by

the Concessioner, an existing Real Property improvement

assigned to the Concessioner in which the Concessioner had

no Leasehold Surrender Interest prior to the Major Rehabilli-

tation shall be considered as a Capital Improvement for all

purposes of this CONTRACT.

(2) This CONTRACT may provide the Concessioner a

Leasehold Surrender Interest in Real Property improvements

resulting from possessory interest obtained under the terms

of a possessory interest concession contract. Exhibit G de-

scribes the Real Property improvements, if any, in which the

Concessioner has such a Leasehold Surrender Interest and

states the value of this Leasehold Surrender Interest as of the

effective date of this CONTRACT.

(3) The Concessioner shall not obtain Leasehold Surrender

Interest under this CONTRACT except as may be provided

in Exhibit A and Exhibit F. Among other matters, no Lease-

hold Surrender Interest shall be obtained as a result of expen-

ditures from the Repair and Maintenance Reserve described

in this CONTRACT, and this CONTRACT does not provide

a Leasehold Surrender Interest as a result of expenditures for

repair and maintenance of Concession Facilities of any na-

ture.

(d) Concession Facilities Improvement Program

(1) The Concessioner shall undertake and complete an im-

provement program (hereinafter “Concession Facilities Im-

provement Program”) costing not more than $8.5 million , as

adjusted for each project to reflect par value in the year of

actual construction in accordance with the appropriate in-

dexes of the Department of Labor’s CPI-U Index, as pub-

lished by the Department of Labor.

(2) The Concession Facilities Improvement Program shall

include, subject to final decisions to be made after environ-

mental and/or historic compliance:

LOCATION PROJECT ESTIMATED | APPROX

COST OF START

PROJECT DATE

Desert View Employee 12 x 2-bedroom apartments $1,962,300 Jan-02

Housi

Desert View Employee 20 x | bedroom apartments $952,840 Jan-03

| South Rim Histonc Relocate concessioner $175,000 Jan-02

Distnct maintenance facility

Desert View Service Renovate structure, enlarge $188,000 Jan-02

Stanon restrooms, convert pumps to

24-hour

Desert View Watch- Renovation $817,250 Jan-03

tower

Desert View Design and construct new $703,710 Jan-03

Desert View Trading Post

Desert View Demolish existing Desert $26,808 Jan-03

View Trading Post

South Rim Village Remodel auto shop at rear $1,787,880 Jul-04

Historic Area of General Offices

Bnght Angel Lodge Renovation of Restaurant, $911,050 Jul-05

Lobby & extenor

Bnght Ange! Lodge Renovate Buckey O'Neil! $72,000 Jul-05

Suite and Red Horse Cabin

South Rim Village Demolish Shirley Hal! $48,000 Jul-05

Historic Area

Hermits Rest Renovation, including re- $451,575 Jan-07

placement of storage build-

ing and septic system

NPS Building One Renovation $376,640 Jan-07

Total Anticipated Cost $8,473,053

(3) The Concessioner shall commence construction under the

Concession Facilities Improvement Program on or before

January 1, 2002 in a manner that demonstrates to the satisfac-

tion of the Director that the Concessioner is in good faith car-

rying the Concession Facilities Improvement Program

forward reasonably under the circumstances. No construction

may begin until the Concessioner receives written approval

from the Director of plans and specifications in accordance

with Exhibit F. During the period of construction, the Con-

cessioner shall provide the Director with such evidence or

documentation, as may be satisfactory to the Director, to

demonstrate that the Concession Facilities Improvement Pro-

gram duly is being carried forward. In the event the Conces-

sioner is unable to construct all of the above projects within

the $8.5 million budget or certain projects do not gain final

approval from the Director, the project list and/or specific

projects will be modified or amended as necessary to reflect

such changes and the full expenditure of the $8.5 million

budget. The amendments will reflect the list above, which is

in priority order.

(4) The Concessioner shall complete and have the Real Prop-

erty improvements available for public use on or before

January 1, 2005. The Director may extend this date in cir-

cumstances where the Director determines that the delay re-

sulted from events beyond the control of the Concessioner.

SEC. 10. MAINTENANCE

(a) Maintenance Obligation

The Concessioner shall be solely responsible for mainte-

nance, repairs, housekeeping, and groundskeeping for all

Concession Facilities to the satisfaction of the Director.

(b) Maintenance Plan

For these purposes, the Director, acting through the Superin-

tendent, shall undertake appropriate inspections, and shall

establish and revise, as necessary, a Maintenance Plan con-

sisting of specific maintenance requirements which shall be

adhered to by the Concessioner. The initial Maintenance Plan

is set forth in Exhibit H. The Director in his discretion may

make reasonable modifications to the Maintenance Plan from

time to time after consultation with the Concessioner. Such

modifications shall be in furtherance of the purposes of this

CONTRACT and shall not be inconsistent with the terms and

conditions of the main body of this CONTRACT.

(1) The Concessioner shall establish and manage a Repair

and Maintenance Reserve. The funds in this Reserve shall be

used to carry out, on a project basis in accordance with Ex-

hibits F and H, repair and maintenance of Concession Facili-

ties that are non-recurring within a seven-year time frame.

Such projects may include repair or replacement of founda-

tions, building frames, window frames, sheathing, subfloors,

drainage, rehabilitation of building systems such as eiectrical,

plumbing, built-in heating and air conditioning, roof re-

placement and similar projects. Projects will be carried out

by the Concessioner as the Director shall direct in writing in

advance of any expenditure being made and in accordance

with project proposals approved by the Director. No projects

may be commenced until the Concessioner receives written

approval from the Director.

(2) Projects paid for with funds from the Repair and Mainte-

nance Reserve will not include routine, operational mainte-

nance of facilities or housekeeping and groundskeeping

activities. Nothing in this section shall lessen the responsibil-

ity of the Concessioner to carry out the maintenance and re-

pair of Concession Facilities or housekeeping and

groundskeeping responsibilities as required by this CON-

TRACT from Concessioner funds exclusive of the funds con-

tained in the Repair and Maintenance Reserve.

(3) The Concessioner shall establish within its accounting

system a Repair and Maintenance Reserve. The Conces-

sioner shall debit to this Reserve, within fifteen (15) days af-

ter the last day of each month that the Concessioner operates

a sum equal to: one percent (1%) of the Concessioner’s gross

receipts for the previous month. If the Concessioner fails to

make timely debits to the Repair and Maintenance Reserve,

the Director may terminate this CONTRACT for default or

may require the Concessioner to post a bond in an amount

equal to the estimated annual Repair and Maintenance Re-

serve allocation, based on the preceding year’s gross receipts.

(4) The balance in the Repair and Maintenance Reserve shall

be available for projects in accordance with the Reserve’s

purpose. For all expenditures made for each project from the

Repair and Maintenance Reserve, the Concessioner shall

maintain auditable records including invoices, billings, can-

celed checks, and other documentation satisfactory to the Di-

rector. Failure to expend Repair and Maintenance Reserve

Funds when directed by the Director shall be considered as a

material breach of this CONTRACT for which the Director

may seek monetary damages and other legal relief, including,

without limitation, termination of this CONTRACT.

(5) Repair and Maintenance Reserve funds shall not be used

for a major rehabilitation as defined in this CONTRACT.

The Concessioner shall obtain no ownership, Leasehold Sur-

render Interest, or other compensable interest as a conse-

quence of the expenditure of Repair and Maintenance Re-

serve funds.

(6) Any Repair and Maintenance Reserve funds not duly ex-

pended by the Concessioner as of the termination or expira-

tion of this CONTRACT shall be retained by the

Concessioner (subject to otherwise applicable terms and con-

ditions of this CONTRACT).

SEC. 11. FEES

(a) Franchise Fee

(1) For the term of this CONTRACT, the Concessioner shal]

pay to the Director for the privileges granted under this

CONTRACT a franchise fee equal to perceny

(__%) of the Concessioner’s gross receipts for the preceding

year or portion of a year.

(2) Neither the Concessioner nor the Director shall have g

right to an adjustment of the fees except as provided below.

The Concessioner has no right to waiver of the fee under any

circumstances.

(b) Payments Due

(1) The franchise fee shall be due on a monthly basis at the

end of each month and shall be paid by the Concessioner jn

such a manner that the Director shall receive payment within

fifteen (15) days after the last day of each month that the

Concessioner operates. This monthly payment shall include

the franchise fee equal to the specified percentage of gross

receipts for the preceding month.

(2) The Concessioner shall pay any additional fee amounts

due at the end of the operating year as a result of adjustments

at the time of submission of the Concessioner’s Annual Fj-

nancial Report. Overpayments shall be offset against the fip}-

lowing year’s fees. In the event of termination or expiration

of this CONTRACT, overpayments will first be offset

against any amounts due and owing the Government, and the

remainder will be paid to the Concessioner.

(3) All franchise fee payments shall be deposited electroni-

cally by the Concessioner using approved National Park Ser-

vice administrative procedures, as described in the Operating

Plan.

An interest charge will be assessed on overdue amounts for

each thirty (30) day period, or portion thereof, that payment

is delayed beyond the fifteen (15) day period provided for

above. The percent of interest charged will be based on the

current value of funds to the United States Treasury as pub-

lished annually in the Treasury Fiscal Requirements Manual.

The Director may also impose penalties for late payment to

the extent authorized by Applicable Law.

(d) Adjustment of Franchise Fee

(1) The Concessioner or the Director may request, in the

event that either considers that extraordinary, unanticipated

changes have occurred after the effective date of this CON-

TRACT, a reconsideration and possible subsequent adjust-

ment of the franchise fee established in this Section. For the

purposes of this Section, the phrase “extraordinary, unantici-

pated changes” shall mean extraordinary, unanticipated

changes from the conditions existing or reasonably antici-

pated before the effective date of this CONTRACT which

have or will significantly affect the probable value of the

privileges granted to the Concessioner by this CONTRACT.

For the purposes of this Section, the phrase “probable value”

means a reasonable opportunity for net profit in relation to

capital invested and the obligations of this CONTRACT.

(2) The Concessioner or the Director must make a request for

a reconsideration by mailing, within sixty (60) days from the

date that the party becomes aware, or should have become

aware, of the possible extraordinary, unanticipated changes, a

100

written notice to the other party that includes a description of

the possible extraordinary, unanticipated changes and why

the party believes they have affected or will significantly af-

fect the probable value of the privileges granted by this

CONTRACT.

(3) If the Concessioner and the Director agree that extraordi-

nary, unanticipated changes have occurred, the Concessioner

and the Director will undertake good faith negotiations as to

an appropriate adjustment of the franchise fee.

(4) The negotiation will last for a period of sixty (60) days

from the date the Concessioner and the Director agree that

extraordinary, unanticipated changes occurred. If the negotia-

tion results in agreement as to an adjustment (up or down) of

the franchise fee within this period, the franchise fee will be

adjusted accordingly, prospectively as of the date of agree-

ment.

(5) If the negotiation does not result in agreement as to the

adjustment of the franchise fee within this sixty (60) day pe-

riod, then either the Concessioner or the Director may request

binding arbitration to determine the adjustment to franchise

fee in accordance with this Section. Such a request for arbi-

tration must be made by mailing written notice to the other

party within fifteen (15) days of the expiration of the sixty

(60) day period.

(6) Within thirty (30) days of receipt of such a written notice,

the Concessioner and the Director shall each select an arbiter.

These two arbiters, within thirty (30) days of selection, must

agree to the selection of a third arbiter to complete the arbi-

tration panel. Unless otherwise agreed by the parties, the ar-

bitration panel shall establish the procedures of the

arbitration. Such procedures must provide each party a fair

and equal opportunity to present its position on the matter to

the arbitration panel.

101

(7) The arbitration panel shall consider the written submis-

sions and any oral presentations made by the Concessioner

and the Director and provide its decision on an adjusted fran-

chise fee (up, down or unchanged) that is consistent with the

probable value of the privileges granted by this CONTRACT -

within sixty (60) days of the presentations.

(8) Any adjustment to the franchise fee resulting from this

Section shall be prospective only.

(9) Any adjustment to the franchise fee will be embodied in

an amendment to this CONTRACT.

(10) During the pendency of the process described in this

Section, the Concessioner shall continue to make the estab-

lished franchise fee payments required by this CONTRACT.

SEC. 12. INDEMNIFICATION AND INSURANCE

(a) Indemnification

The Concessioner agrees to assume liability for and does

hereby agree to save, hold harmless, protect, defend and in-

demnify the United States of America, its agents and em-

ployees from and against any and all liabilities, obligations,

losses, damages or judgments (including without limitation

penalties and fines), claims, actions, suits, costs and expenses

(including without limitation attorneys fees and experts’ fees)

of any kind and nature whatsoever on account of fire or other

peril, bodily injury, death or property damage, or claims for

bodily injury, death or property damage of any nature what-

soever, and by whomsoever made, in any way connected

with or arising out of the activities of the Concessioner, its

employees, agents or contractors under this CONTRACT.

This indemnification shall survive the termination or expira-

tion of this CONTRACT.

(b) Insurance in General

(1) The Concessioner shall obtain and maintain during the

entire term of this CONTRACT at its sole cost and expense,

102

the types and amounts of insurance coverage necessary to

fulfill the obligations of this CONTRACT as determined by

the Director. The initial insurance requirements are set forth

below and in Exhibit I. Any changed or additional require-

ments that the Director determines necessary must be reason-

able and consistent with the types and coverage amounts of

insurance a prudent businessperson would purchase in simi-

lar circumstances. The Director shall approve the types and

amounts of insurance coverage purchased by the Conces-

sioner.

(2) The Director will not be responsible for any omissions or

inadequacies of insurance coverages and amounts in the

event the insurance purchased by the Concessioner proves to

be inadequate or otherwise insufficient for any reason what-

soever.

(3) At the request of the Director, the Concessioner shall at

the time insurance is first purchased and annually thereafter,

provide the Director with a Certificate of Insurance that accu-

rately details the conditions of the policy as evidence of

compliance with this Section. The Concessioner shall pro-

vide the Director immediate written notice of any material

change in the Concessioner’s insurance program hereunder,

including without limitation, cancellation of any required in-

surance coverages.

(1) The Concessioner shall provide commercial general li-

ability insurance against claims arising out of or resulting

from the acts or omissions of the Concessioner or its em-

ployees, agents or contractors, in carrying out the activities

and operations required and/or authorized under this CON-

TRACT.

(2) This insurance shall be in the amount commensurate with

the degree of risk and the scope and size of the activities re-

quired and/or authorized under this CONTRACT, as more

103

specifically set forth in Exhibit I. Furthermore, the commer-

cial general liability package shall provide no less than the

coverages and limits described in Exhibit I.

(3) All liability policies shall specify that the insurance com-

pany shall have no right of subrogation against the United

States of America and shall provide that the United States of

America is named an additional insured.

(4) From time to time, as conditions in the insurance industry

warrant, the Director may modify Exhibit I to revise the

minimum required limits or to require additional types of in-

surance, provided that any additional requirements must be

reasonable and consistent with the types of insurance a pru-

dent businessperson would purchase in similar circum-

stances.

(d) Property Insurance

(1) In the event of damage or destruction, the Concessioner

will repair or replace those Concession Facilities and per-

sonal property utilized by the Concessioner in the perform-

ance of the Concessioner’s obligations under this

CONTRACT.

(2) For this purpose, the Concessioner shall provide fire and

extended insurance coverage on Concession Facilities for all

or part of their replacement cost as specified in Exhibit | in

amounts no less than the Director may require during the

term of the CONTRACT. The minimum values currently in

effect are set forth in Exhibit I.

(3) Commercial property insurance shall provide for the

Concessioner and the United States of America to be named

insured as their interests may appear.

(4) In the event of loss, the Concessioner shall use all pro-

ceeds of such insurance to repair, rebuild, restore or replace

Concession Facilities and/or personal property utilized in the

Concessioner’s operations under this CONTRACT, as di-

104

rected by the Director. Policies may not contain provisions

limiting insurance proceeds to in situ replacement. The lien

provision of Section 13 shall apply to such insurance pro-

ceeds. The Concessioner shall not be relieved of its obliga-

tions under subsection (d)(1) because insurance proceeds are

not sufficient to repair or replace damaged or destroyed prop-

erty.

(5) Insurance policies that cover Concession Facilities shall

contain a loss payable clause approved by the Director which

requires insurance proceeds to be paid directly to the Conces-

sioner without requiring endorsement by the United States.

The use of insurance proceeds for repair or replacement of

Concession Facilities will not alter their character as proper-

ties of the United States and, notwithstanding any provision

of this CONTRACT to the contrary, the Concessioner shall

gain no ownership, Leasehold Surrender Interest or other

compensable . terest as a result of the use of these insurance

proceeds.

(6) The commercial property package shall include the cov-

erages and amounts described in Exhibit I.

SEC. 13. BONDS AND LIENS

(a) Bonds

The Director may require the Concessioner to furnish appro-

priate forms of bonds in amounts reasonable in the circum-

stances and acceptable to the Director, in order to ensure

faithful performance of the Concessioner’s obligations under

this CONTRACT.

(b) Lien

As additional security for the faithful performance by the

Concessioner of its obligations under this CONTRACT, and

the payment to the Government of all damages or claims that

may result from the Concessioner’s failure to observe any

such obligations, the Government shall have at all times the

105

first lien on all assets of the Concessioner within the Area,

including, but not limited to, all personal property of the

Concessioner used in performance of the CONTRACT here-

under within the Area and any Leasehold Surrender Interest

of the Concessioner.

SEC. 14. ACCOUNTING RECORDS AND REPORTS

(a) Accounting System

(1) The Concessioner shall maintain an accounting system

under which its accounts can be readily identified with its

system of accounts classification. Such accounting system

shall be capable of providing the information required by this

CONTRACT, including but not limited to the Concessioner’s

repair and maintenance obligations. The Concessioner’s sys-

tem of accounts classification shall be directly related to the

Concessioner Annual Financial Report Form issued by the

Director.

(2) If the Concessioner’s annual gross receipts are $250,000

or more, the Concessioner must use the accrual accounting

method.

(3) In computing net profits for any purposes of this CON-

TRACT, the Concessioner shall keep its accounts in such

manner that there can be no diversion or concealment of

profits or expenses in the operations authorized under this

CONTRACT by means of arrangements for the procurement

of equipment, merchandise, supplies or services from sources

controlled by or under common ownership with the Conces-

sioner or by any other device.

(b) Annual Financial Report

(1) The Concessioner shall submit annually as soon as possi-

ble but not later than one hundred twenty (120) days after the

last day of its fiscal year a financial statement for the preced-

ing fiscal year or portion of a year as prescribed by the Direc-

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