Concessionaire Desk GuideTable of Contents

Chapter 1: Int rodu ction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-1

Preface . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-1Acknowledgments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-1Program Objective . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-1Purpose of the Desk Guide . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-1Background . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-2Benefits of Campground Concessions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-2Authority for Campground Concessions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1-3

Chapter 2: C oncess ion Feasibilit y . . . . . . . . . . . . . . . . . . . . . . 2-1

Programmatic Feasibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-1Conversion to Dispersed Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-1FS Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-1Recreation Fee Demonstration Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-1G-T Concessions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-2Private/Public Ventures (PPV) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-2Term Permit Program . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-2

Site-Specific Feasibility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-3Local Site and Facilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-3

Condition of the Facility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-3Review of Concession in Context of Recreation and Infrastructure Maintenance Program . . . . . . . . . . . . . . . . . . . . . . . . . 2-3

Site History . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-3Scope of the Concession . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-3Agency Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-3

Budgetary Constraints . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-3Other Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-4

Economic Viability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-4Customer Service Needs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-4Effects on the Local Community . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-4

NEPA Documentation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-4

Appendix 2A: Feasibility Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-5Appendix 2B: Economic Feasibility of Conversion to a Concession . . . . . . . . . 2-9Appendix 2C: Cost/Benefit Analysis for Conversion to a Concession . . . . . . . 2-11Appendix 2D: Income/Expense Worksheet for Determining

Economic Viability of a Concession . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2-13

Chapter 3: The Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-1

Considerations for Issuing a Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-1Developing a List of Potential Applicants . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-1Customer Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-1Application Evaluation Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-1

The Evaluation Team . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-2The Evaluation Criteria . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-2Relative Importance of Evaluation Criteria . . . . . . . . . . . . . . . . . . . . . . . . 3-5

Time Frame for Preparing a Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-6Development of a Prospectus . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-7

Cover Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-7Table of Contents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-7Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-7Site Descriptions and Income-and-Expense Data . . . . . . . . . . . . . . . . . . . . . . 3-8

Area Description . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-8FS Site Descriptions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-8Income-and-Expense Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-9

The Opportunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-9FS Programs and Policy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-9Special-Use Permit to Be Issued . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-11G-T Fee Offset Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-11Standard Operating Plan Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-12

Proposed Operating Plan Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-14Operating Season . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-15Staffing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-15Required Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-15Optional Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-16Concessionaire Income and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . 3-17

Other Required Submissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-20Financial Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-20Miscellaneous Submissions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-21

Appendices and Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-21Mandatory Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-21Optional Appendices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-21Documents Available upon Request . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-21

Advance Public Notice . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-22Notice of the Opportunity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-33Target Audience . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-22

Appendix 3A: Sources for Potential Applicants . . . . . . . . . . . . . . . . . . . . . . . 3-23Appendix 3B: FS 6500-25, Request for Verification. . . . . . . . . . . . . . . . . . . . 3-24Appendix 3C: Time Frame for Issuance of a Prospectus . . . . . . . . . . . . . . . 3-26Appendix 3D: Prospectus Outline . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-28Appendix 3E: Inventory of Government-Furnished Property . . . . . . . . . . . . . 3-33Appendix 3F: FS 2700-4e, 'Special-Use Permit for Campground

and Related Granger-Thye Concessions. . . . . . . . . . . . . . . . . . . . . . . . . 3-35Appendix 3G: Sample List of Holder-Furnished Property . . . . . . . . . . . . . . . 3-54Appendix 3H: Sample Holder Maintenance-and-Reconditioning . .

Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3-55Appendix 31: FS 6500-24, Financial Statement . . . . . . . . . . . . . . . . . . . . . . 3-57Appendix 3J: Sample Notification of a Concession Opportunity . . . . . . . . . . 3-62

Chapter 4: Selecting a Concessionaire . . . . . . . . . . . . . . . . . . 4-1

Evaluation Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-1Fixed Weights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-1Non-Fixed Weights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-1Tradeoff Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-1

Evaluation of Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-2Selection of an Applicant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-3

Establishing a Competitive Range . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-3Written or Oral Discussions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-3

Issuance of a Permit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-4Follow-Up . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-4FOIA Requests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-4Appeals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-5Prerequisites to Issuance of a Permit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-5

Appendix 4A: Sample Rating Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4-6Appendix 4B: Sample Notification Letter: Selected Applicant . . . . . . . . . . . . . . 4-10Appendix 4C: Sample Notification Letter: Non-Selected Applicant . . . . . . . . . . 4-12Appendix 4D: Determination of Financial Ability . . . . . . . . . . . . . . . . . . . . . . . . 4-13

Chapter 5: Permit Fees and G-T Fee Offset . . . . . . . . . . . . . . . . . . . . 5-1

Establishing the Permit Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-1Establishing a Minimum Fee Based on Appraisal . . . . . . . . . . . . . . . . . 5-1

Fee Component for the Use of Government Land . . . . . . . . . . . . . . 5-2Fee Component for the Use of Government Improvements . . . . . . 5-2Combined Fee . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-2

Establishing a Minimum Fee Based on Gross Receipts . . . . . . . . . . . . 5-2Establishing a Minimum Fee Based on a Schedule . . . . . . . . . . . . . . . 5-2

G-T Fee Offset . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-2Alteration of Government Improvements during M&R . . . . . . . . . . . . . . 5-3G-T Fee Offset Agreement and Certification . . . . . . . . . . . . . . . . . . . . . 5-3Long-Term Government M&R . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

1. Modified Fee Schedule for Accelerated G-T FeeOffset Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54

2. FS Performs Work under Collection Agreement . . . . . . . . . . . . . 5-4Offset for Concessions Involving Multiple Sites . . . . . . . . . . . . . . . . 5-4Collection Agreements for G-T Fee Offset Projects . . . . . . . . . . . . 5-4

Permit Fee Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5-5

Appendix 5A: Sample Government M&R Projects . . . . . . . . . . . . . . . . . . 5-6Appendix 5B: Sample Annual Granger-Thye Gee Offset Agreement . . . . 5-8Appendix 5C: Granger-Thye Fee Offset Certification Form . . . . . . . . . . 5-10

Chapter 6: Technical Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-1

Insurance 6-1Master Policy Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-1Liability Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-2Casualty Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-2Combined-Single-Limit Policies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-3Insurance for Multiple Permits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-3Insurance for Permits Issued to States . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-3Insurance for Permits Issued to Federal Agencies . . . . . . . . . . . . . . . . . . . . 6-3Administering Insurance Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-3

Bonding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-4Type of Bond . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-4Forms of Bonding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-5

Collection Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-5

Appendix 6A: Performance Bond for Special-Use Permits . . . . . . . . . . . . . . . . 6-7Appendix 6B: Sample Collection Agreement for G-T Fee

Offset Work . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6-8

Chapter 7: Permit Administration . . . . . . . . . . . . . . . . . . . . . . . . . 7-1

Training 7-1Orientation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-1Permit and AOP Review . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-1

Performance Evaluations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-1Adverse Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-2

Revocation and Suspension . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-2Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-3

Claims against the Holder . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-3Health and Safety Inspections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-3

Appendix 7A: Standard Performance Evaluation Form forCampground and Related Granger-Thye Concessions . . . . . . . . . . . . . . . . . 7-4

Appendix 7B: Enforcement Action Checklist . . . . . . . . . . . . . . . . . . . . . . . . . . . 7-8Appendix 7C: Sample Noncompliance Letter . . . . . . . . . . . . . . . . . . . . . . . . . . 7-9

Chapter 8: Operations Library . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-1

Appendix 8A: Use and Revenue Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8-2Appendix 8B: National Recreation Reservation Service . . . . . . . . . . . . . . . . . . 8-4Appendix 8C: Interpretive Services at Concession Campgrounds . . . . . . . . . . 8-5Appendix 8D: Concessionaire Compliance with Labor Law . . . . . . . . . . . . . . . 8-8Appendix 8E: Law Enforcement at Concession Campgrounds . . . . . . . . . . . . 8-11Appendix 8F: Customer Service Comment Cards . . . . . . . . . . . . . . . . . . . . . . 8-16

Chapter 2

Concession Feasibilit y

This chapter addresses three levels of concessionfeasibility analysis:

* Programmatic feasibility. * Site-specific feasibility.* NEPA documentation.

The need for and extent of concession feasibilityanalysis will vary. If the feasibility of a concessionneeds to be determined, it should be done beforecommencing the process required by the NationalEnvironmental Policy Act (NEPA), 42 U.S.C. 4321et seq. If a complete feasibility determination for aG-T concession has been made, skip to thediscussion on NEPA documentation in thischapter (page 24).

Programmatic Feasibility

The first step in feasibility analysis isprogrammatic. At this level of analysis, reviewmanagement options to determine whether aconcession is appropriate, and, if so, which typebest provides facilities and services.

The FS has several options for providingrecreation facilities and services. Which option ismost suitable for a given site should bedetermined before preparing a prospectus.Economic viability of a site is key in selecting theappropriate program.

Management options range from site closure toconcession operation of strictly privately ownedimprovements. The most common options are G-T concessions and FS management. If a G-Tconcession is the best management option,consult the Site-Specific Feasibility section of thischapter (page 2-3).

Conversion to Dispersed Use

A site's design may render it infeasible for feecollection. The amount of use fees may beinsufficient to cover the cost of collection or thecost of a site's operation and maintenance. If asite cannot be redesigned to be efficient, it may beappropriate to close it and convert it to disperseduse.

FS Management

Sometimes called force account management,under this program operating and maintenancecosts are paid from FS-appropriated funds, anduse fees are paid directly to the Treasury. On-sitestaffing may be provided by volunteer hosts orother FS programs, such as the SeniorCommunity Service Employment Program(SCSEP) or Youth Conservation Corps.

A host-managed campground fulfills two goals: itbenefits the agency by providing a service to thepublic, and it benefits the host by offering anopportunity to engage in recreational activities onthe National Forests, while contributing to theagency's recreation program. This option may beappropriate for sites that are popular with thepublic, but do not have the economy of scale tosupport a concession.

Recreation FeeDemonstration Program

The recreation fee demonstration program isauthorized by the Omnibus Consolidated Rescis-sions and Appropriations Act of 1996, Public Law104-134. A provision of the Act authorizes the FSto charge use fees for the use of outdoor-recreation sites, facilities, visitor centers,equipment, or services. Up to 100 projects maybe approved under this legislation. The authorityfor the fee demonstration program expiresSeptember 30,

Chapter 2: Concession Feasibility

Conversion from FS management to concession-aire operation often eases the District's operation-and-maintenance budget because theconcessionaire covers the cost of day-to-dayoperations, and because the fee to the Governmentmay be offset by the cost of eligible GovernmentM&R at the site. However, conversion to aconcession requires a shift in staff expertise andfunding from operating and maintaining recreationsites to expertise in permit administration. Whenmaking this shift, training in permit administration isessential.

Other Considerations

What is the public-service rationale for establishinga concession? What type of control over theconcession does the FS need? How muchoversight can the FS provide? Are there potentialconflicts with existing uses?

Economic Viability

Is there enough revenue to cover the cost ofoperations? Is the operating season long enough topromote a viable business? How much staff will berequired at a particular site (or combination of sites)to provide adequate public service, and are siterevenues sufficient to afford the necessary staff? Isthere competitive interest in this site as aconcession?

What type of company is likely to be interested inoperating the site? Consider the recreation market.Are there private-sector recreation providers onprivate land who are competing for the samecustomers? How will they be affected? Are therespecial taxes or required licenses that add cost tothe operation? Will local zoning laws or health andsafety ordinances affect economic viability?

Customer Service Needs

What are the minimum levels of acceptablecustomer service at these sites? Are revenuessufficient to provide an acceptable level of service?If not, should changes be made in design,management, or user expectations? What addition-al services would interest the public, e.g.,interpretive programs or additional daytimeactivities?

Would a concessionaire be able to provide qualityprograms? Will these services generate enough

revenue to cover expenses? If not, are total site

revenues sufficient to cover these programs? Will aconcessionaire be able to provide a higher qualityof customer service than the FS?

Effects on the Local Community

Would the community support having a privatebusiness operate FS recreation sites in the area?Will users of the site be receptive to a concession-aire? How will county commissioners and otherlocal officials react to a concession? Will revenuesto counties be affected? It is important to develop agood communication strategy in advance.

NEPA Documentation

In general, under NEPA’s implementing regulationsa federal agency conducts an environmentalassessment (EA) to determine whether a proposedaction may constitute a major federal actionsignificantly affecting the quality of the humanenvironment. If so, an environmental impactstatement (EIS) must be prepared for the proposedaction.

Additionally, NEPA’s implementing regulationsallow federal agencies to categorically exclude fromdocumentation in an EA or EIS certain types ofproposed actions which do not individually orcumulatively have a significant effect on the humanenvironment. Forest Service NEPA procedures,found in Forest Handbook (FSH) 1909.15,categorically exclude certain types of proposedactions from documentation in an EA or EIS,absent extraordinary circumstances. A list ofexamples of extraordinary circumstances are setout at FSH 1909.15, section 31.03, paragraph 2.1

Three categories may be applicable to issuance ofa permit for existing campground concessionswhen no or minor changes to the physicalenvironment are proposed:

* Repair and maintenance of recreation sites andfacilities. FSH 1909.15, sec. 31.1b, para 5. Aproject or case file and decision memo are notrequired but may be prepared. FSH 1909.15,sec. 31.1b.

* Approval, modification, or continuation of minor,short-term (one year or less) special uses ofNational Forest System lands. FSH 1909.15sec. 31.1b, para. 8 This category may apply,for example, when it is anticipated that after oneyear or less of authorized use a capitalinvestment project and associated NEPA

Chapter 3: The Prospectus

Considerations for issuin g a Prospectus : Application Evaluation Plan

1. Proposed Operating Plan Provisions

2. Business Plan and Business Experience

The quality and quantity of required andoptional services are assessed under thiscriterion. Ask applicants to explain howrequired and optional public services will bedelivered. Have applicants demonstratequality customer service and timely compli-ance with permit and operating planrequirements. See Development of aProspectus,. Proposed Operating PlanProvisions, in this chapter for detailedinformation on this topic.

Business Plan

Require applicants to submit a business plan.For each part of the project, the projectbusiness plan must specify whether theapplicant will perform the work or meet therequirement via a third party. The applicantmust identify any third parties who will beresponsible for any of the operational aspectsof the concession, and describe their relevantexperience.

The plan should estimate the costs ofoperating the facilities. It should identify allinterim and permanent sources of funds.

The plan should include information con-cerning the business organization andorganizational structure required by 36 CFR251.54(e)(1) and 251.54(e)(2)(ii), such asapplicant name and mailing address,designated agent, evidence of incorporationand good standing, and the name andaddress of each affiliate of the applicant.Applicants that are limited-liability companiesshould provide the names and interests of thecompanies' principals.

State that if the applicant is not incorporatedin the state where the concession is located,the applicant must submit a license to dobusiness in that state.

Business Experience

Instruct applicants to furnish a detailed descriptionof experience relating to operation of recreationsites, such as campgrounds, beaches, boat ramps,and associated facilities. The description shouldinclude experience in private business, publicservices, or any nonprofit or other relatedenterprises. For each business venture, haveapplicants provide:

* The dates for the business experience. * The location of the business. * A description of services provided. * A description of customers served. * The number of employees supervised. * The volume of business.

For experience in managing FS or otherGovernment campgrounds and associated facilities,applicants should also provide copies of annualwritten performance evaluations, or state that anevaluation was not completed for the yearsreferenced.

Require applicants to furnish three businessreferences with names, addresses, and telephonenumbers in support of applicable businessexperience.

3. Financial Resources

Under this criterion, evaluate applicants based onthe amount of funding that is readily available tothem. Funding can take the form of cash, letter ofcredit, stocks, or mutual funds. Use completedform FS-6500-25, “Request for Verification,” orother verifiable information submitted to assist inmaking this assessment. Include the form as anappendix to the prospectus. Review of thecompleted FS-6500-25 forms or acceptablesubstitute will also be one of the components of theFAD made on the selected applicant. (Appendix 3B,pages 3 - 24-25, contains a copy of FS-6500-25.)

Specify in the instructions for FS-6500-25 the FSaddress to which the completed forms should besent. Require all applicants to complete blocks 1through 5 of the form and to send a copy to eachfinancial institution with which they do business.Each of these financial institutions should

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Chapter 3: The Prospectus

Considerations tor lashin g a Prospectus: Application Evaluation Plan

complete blocks 6 through 15 of the form,and return it to the address specified in theform.

4. Fee to the Government

This criterion addresses the fee the conces-sionaire will pay for the use of Government-owned improvements and their associatedland, as well as work that will be required tooffset that fee. Refer to Chapter 5, PermitFees and G-T Fee Offset,' for furtherdiscussion of these topics.

State that the Government is obligated toobtain fair market value for the use of its landand improvements. Specify how the fee willbe determined, and the minimum fee. Theprospectus should state that applicants maypropose any fee they wish, but that the feeproposed may not be below fair marketvalue. State that applicants may propose afee higher than the FS stated minimum fee. The prospectus shuld also inform applicantsthat they may propose a fee below the statedminimum if they believe this lower feerepresents a fair market value. However,state that an application with a proposed feethat is below the minimum fee may berejected if the FS determines that theproposed fee does not reflect fair marketvalue.

Applicants should also be asked to describehow they will plan and complete any G-T feeoffset items. See “Development of aProspectus,'” “The Opportunity,” “G-T FeeOffset Agreement”. in this chapter forinformation on this topic.

5. Fees Charged to the Public

Under this criterion, the services that will beprovided are compared to the prices that willbe charged for them. For example, anapplicant that provides a wide range ofquality services at a moderate price wouldreceive a higher rating under this criterionthan an applicant that provides a limitedrange of services for a high price.

Generally, the FS does not regulate prices,but reserves the right to do so. Market

mechanisms should dictate what users arecharged at concession sites. In some locations,lack of competition may create a monopoly. It isappropriate in these circumstances to state thatprices and price increases are subject to FSapproval. Prices may be compared to prevailingrates for comparable services and facilities in thearea, to determine if the public will receive a goodvalue for the service provided.

Ask applicants to provide a list of all proposed feesto be charged to the public, including pricingpolicies, use fees, other service fees/rentals, andsundries. See 'Development of a ProspectusesProposed Operating PlanProvisions,''Concessionaire Income andExpenses, for a discussion of these types of fees.The proposed fees should be tied to the proposedoperating plan provisions.

6. Willingness to Take Multiple Sites

Multiple sites may be included in the sameprospectus. Separate permits may be issued foreach site or administrative unit advertised in theprospectus. Alternatively, the FS may put multiplesites or all sites included in the prospectus underthe same permit.

Putting several recreation sites or complexesunder one permit may simplify administration orenhance the business viability of an opportunity. Indetermining whether to consolidate recreationsites, balance the advantages of simplifiedadministration and enhanced viability against thedisadvantage of reduced competition and impactsto small business.

The prospectus should specify whether a singlepermit or multiple permits will be issued, and if thelatter, for which sites each permit will be issued.The prospectus must specify whether applicantsmay apply for any site or sites they wish, orwhether applicants must apply for a minimumnumber of sites, a certain combination of sites, orall sites. If applicants may apply for any site orsites they wish, state whether or not applying formore sites or a certain combination of sites willresult in a higher rating.

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Chapter 3: The Prospectus

Development of a Prospectus : The Opportunity

canceling a reservation.

Appendix 8B is reserved for additionalinformation on the NRRS, which will bedeveloped in conjunction with award of the newNRRS contract. A National RecreationReservation Service Guidebook has beendrafted that provides detailed information on theNRRS. Consult the chapter on permitadministration for specific language to insert inprospectuses, operating plans, and reservationplans with respect to the NRRS in general andto ensure holder compliance with changes tothe NRRS in particular.

Golden Age / Golden Access Passports

State that concessionaires must honor GoldenAge and Golden Access Passports. Theseentitle the holder to a 50 percent discount onuse fees that are charged per vehicle, perperson, or per single-family unit.

Camp Stamps

Concessionaires must honor Camp Stamps,and may submit them to the FS for reimburse-ment.

Free Fishing/Camping Day Policy

Note Forest policy on free fishing/campingdays. Until national policy is adopted, mandato-ry participation in these events by concession-aires is discouraged, but voluntary participationis encouraged.

Customer Service Comment Cards

State that the concessionaire will be required tomake available to the public Form FS-1300-5,Customer Service Comment Cards (seeAppendix 8F, pages 8 - 16-17). Some Forestsand Regions have other forms besides theCustomer Service Comment Card. Indicatewhether there are other customer feedbackforms that must be made available to the public.

Any required forms must have an Office ofManagement and Budget (OMB) controlnumber for Paperwork Reduction Act compli-ance. Indicate whether applicants will receiveadditional evaluation credit for instituting acustomer feedback program of their own, as

part of their business.

Compilation of Use and Revenue Data

This section describes requirements forcompiling and submitting use and revenue data.A standard form is provided in Appendix8A (page 8-3), which is being submitted for anOMB control number for Paperwork ReductionAct compliance. Supply copies of this form, andinstruct applicants that they must use it orprovide comparable data in an alternate format.Indicate that the FS may require participation inrecreation use surveys that the agencyconducts.

Performance Evaluations

Indicate that a mid-year and an annualperformance evaluation will be performed, andthat an unsatisfactory annual rating may because for suspension or revocation of thepermit. Also state that a sustained satisfactoryperformance is necessary an extension. (SeeChapter 7 for a complete discussion ofperformance evaluations.)

Accessibility

Offering accessible programs is required bylaw, makes good business sense, and providesbetter customer service.

The Forest Service is responsible for ensuringthat any Government M&R performed atconcession sites meets both Uniform FederalAccessibility Standards (UFAS) and AmericansWith Disabilities Act Accessibility Guidelines(ADAAG), where applicable, and that outdoorrecreation opportunities (e.g., trails or fishingstations) meet the agency's accessible outdoor-recreation guidelines, Universal Access toOutdoor Recreation; A Design Guide, until theArchitectural and Transportation BarriersCompliance Board (Access Board or ATBCB)finalizes ADAAG for outdoor recreation.

It is the responsibility of the FS to perform aself-evaluation of programs and facilities foraccessibility, and to develop a transition plan.Use the transition plan as appropriate todevelop requirements for program accessibilityin the prospectus.

Chapter 3: The - Prospectus

Development at a Prospectus : The Opportunity

ADAAG, and the agency's accessibility guidelines.(See Chapter 5 for discussion of GovernmentM&R and G-T fee offset.)

Additionally, state that it is the concessionaire'sresponsibility to ensure effective communicationwith interested persons, including individuals withimpaired vision or hearing, so that all visitors mayobtain information on accessible services,activities, and facilities. Concessionaires mustensure effective day-to-day communication withindividuals with disabilities, in accordance with 7CFR 15e, Section 504 of the Rehabilitation Act, asamended, and other related Federal and statelaws. Information should be provided, uponreasonable request, in alternative formats such asbraille, audio tape, and large print. Sign languageinterpreters require advance notice (usually 48hours) for scheduling. Inform the concessionaire ofavailable services in the area and the lead timerequired to obtain them.

Special-Use Permit to Be Issued

State that the selected applicant will be required tocomply with a special-use permit, and that astandard permit for this type of concession isattached as an appendix to the prospectus. Whencompleted, Appendix 3F will contain the standardspecial-use permit, FS-2700-4h, Special-UsePermit for Campground and Related Granger-Thye Concessions..

This section discusses permit provisions specificto concessions covered by this desk guide (permitterm and renewal), and a fairly new provision(responsibility for day-to-day activities).

Permit Term

Refer to Clause l.C of FS-2700-4h. The agencyreserves the right to set the term for the permit.The prospectus must specify the permit term. Theinitial term will typically be five years, with anoption to extend the permit term for five years atthe sole discretion of the authorized officer. Thedecision to extend the term must be based onsustained satisfactory performance. (Refer toChapter 7 for a detailed discussion of performance

evaluations.) The agency may issue a permit for ashorter term, based on administrative need. Forexample, the opportunity may be for a three- orone-year permit with no extension, when a capitalinvestment project is anticipated.

Until agency policy has been changed, issue permitswith a one-year term, with an option at the agency'ssole discretion to extend the permit term for fourconsecutive one-year periods, or with a three-yearterm, with an option at the agency's sole discretion toextend the permit term for two consecutive one-yearperiods. (Refer to Chapter 7 for a detailed discussionof performance evaluations.)

Renewal

Refer to Clause l.D of FS-2700-4h. FS-2700-4h doesnot provide for renewal. Once the permit expires,continuation of the type of use and occupancyauthorized by the permit is at the sole discretion of theauthorized officer, and must be subject to acompetitive offering.

Responsibility for Day-to-Day Activities

Refer to Clause II.F of FS-2700-4h. As a general rule,the holder must conduct the day-to-day activitiesauthorized by the permit. Some, but not all, of theseactivities (such as boat rentals or garbage disposal)may be conducted by a party other than the holder,but only with prior written approval of the authorizedofficer. The holder will continue to be responsible forcompliance with all the terms of the permit.

G-T Fee Offset Agreement

As owner of the improvements, the Governmentbears responsibility for M&R that extend the life of theimprovements. All or part of the permit fee may beoffset by the cost of Government M&R. (See Chapter5 for a detailed discussion of these topics.) G-T feeoffset projects must be documented in an annual G-Tfee offset agreement that will become part of thepermit. The agreement may be amended at theagency's discretion.

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Chapter 3: The Prospectus

Development of a Prospectus: The Opportunity

The following should be specified in this section:

* A description of Government M&R.

* The portion of the permit fee that will beoffset by Government M&R.

* A prioritized list of G-T fee offset projectsthat may be required. Describe the work andits location, estimated cost, specifications,and deadlines. This list should be includedin an appendix to the prospectus. (Appendix5A contains a sample list of G-T fee offsetprojects, and Appendix 5B contains asample G-T fee offset agreement.)

* Specification of requirements for G-T feeoffset projects, including use of a particularbrand or color of paint to match existingfacilities, a particular brand or model for areplacement item, or a certain technique fora particular job. Note that placing too manylimitations on the concessionaire mayunnecessarily increase the cost of projects.Provide available design standards.

* Indicate whether the concessionaire will berequired, or has the option, to enter into acollection agreement with the FS to performGovernment M&R. (See Chapter 6 for adiscussion of collection agreements.)

* A description of G-T fee offset accountingprocedures. (See Chapter 5 for moreinformation on this subject.)

Standard Operating Plan Provisions

An annual operating plan (AOP) must beprepared by the concessionaire and approved bythe authorized officer. The AOP will become partof the permit. This section of the prospectusaddresses FS requirements for the AOP thathave no bearing on the selection process.

The AOP will elaborate on agency policy andpermit clauses by establishing schedules, duedates, and details concerning implementation.These items do not need to be addressed inapplications. Rather, they may be coordinatedwith the selected applicant. However, providingan outline of standard AOP provisions will give

prospective applicants a complete understandingof the operational requirements governing theconcession sites.

Not every AOP will have the same combinationof standard provisions. The selection of standardAOP provisions may vary, depending on thenature of the concession. The following is a listof some standard AOP provisions that are ofgeneral interest, and instructions on how to draftthem. Where appropriate, they are keyed tocorresponding clauses in FS-2700-4h.

Site Capacities

Identify any unit capacities for sites, includingsingle and multiple units, group areas, andparking areas. This information may be providedin an appendix to the prospectus. Describe anyuse restrictions, such as boating or floatingrestrictions, and how the concessionaire shouldenforce them.

Reserved Administrative Use

if the FS anticipates using campsites or otherfacilities for administrative purposes, specify thenumber of sites and days that will be reserved bythe FS. For example, 'Campsite #10 is reservedfrom June 15 to July 15 for a Forest Service fieldbiologist at no cost to the agency, or "The ForestService reserves the right to use Group Shelter#3 for three days during the season."

Capital Investment Projects

Where G-T fee offset cannot generate enoughfunds to cover the cost of needed GovernmentM&R at a concession site, capital investmentprojects may be required. Anticipate theseprojects before issuing a prospectus, anddescribe them in the prospectus. Stagger thework so that most of the concession isoperational during construction. Notify applicantsof the sequence in which the work will be done,and state that once a portion is finished, it willbecome available for operation.

If income-producing sites will be affected, informapplicants of how many sites will be closed eachseason. For example, "Loop C

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Chapter 3: The Prospectus

Development of a Prospectus: The Opportunity

(25 units) will be under construction in 1999. Oncecompleted and operational, Loop C will be opened,and Loop B (30 units) will be closed for renovationsState that the Forest Service shall not be liable forany claim for damages associated with closure ofsites under construction. Include the same statementin the AOP.

Holder-Furnished Property

State that the concessionaire will be expected toprovide all supplies, equipment, and vehiclesnecessary to operate the concession sites inaccordance with permit and AOP requirements.All-terrain vehicles, motorcycles, motorbikes,and similar vehicles may not be used atconcession sites without prior written approvalfrom the FS. Vehicles must be attractive, clean,quiet, and well maintained. A professional-caliber sign containing the concessionaire'sname must be displayed on the door of eachvehicle used at concession sites.

A sample list of holder-furnished property maybe included as an appendix to the prospectus.(Appendix 3G, on page 3-54, contains a samplelist of holder-furnished property.)

Holder M&R

Refer to Clauses II.C and IV.E.1(c) of FS-2700-4h. The concessionaire, at its expense, will berequired to perform holder M&R under a holderM&R plan developed by the FS that will becomepart of the AOP. This section defines holderM&R and describes required holder M&Rresponsibilities and their frequency. A holderM&R plan should be included as an appendix tothe prospectus. (Appendix 3H, pages 3 - 55-56,contains a sample holder M&R plan.)

Preseason Preparation and Post-SeasonCleanup

List the work to be done to open each site. Listthe work to be done at the end of the

season for each site. Describe activities andminimum standards.

Other Special Uses

Refer to Clause l.G of FS-2700-4h. Describeany other scheduled or existing special uses inthe permit area, such as grazing, outfitting andguiding, and recurring recreation events.

Site Protection

Clauses II.G, III.F, III.G, and V of FS-2700-4haddress the concessionaire's site protectionresponsibilities. Note whether a vegetationmanagement plan exists, and whether itcontains conditions the concessionaire mustmeet. Acknowledge threatened-and-endangered-species protocols that may exist.

Erosion Control

Refer to Clause III.G of FS-2700-4h. The AOPshould address appropriate erosion controlpractices during and after site construction andother ground-disturbing projects.

Site Hazards

Refer to Clause II.G and III.E of FS-2700-4h.The concessionaire should conduct a preseasoninspection of the sites to identify existing andpotential hazards, including hazard trees. Theconcessionaire is responsible for monitoring andidentifying hazard trees. The concessionaire willalso remove hazard trees, subject to prior FSapproval. The AOP should address appropriatedisposal, e.g., the AOP may state that the FSwill sell commercial-grade timber. The FS mayconduct timber sales following significantblowdown. Monitoring, identification andremoval of hazard trees are holder M&R.Discuss frequency and cost of hazard treeremoval at each site, if atypical. Describe anyconditions, such as stand age, density, andweather patterns, that would tend to increasethe number of hazard trees.

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Chapter 3: The Prospectus

Development of a Prospectus: The Opportunity I Proposed Operating Plan Provisions

Wind Damage

Refer to Clauses III.E and III.F of FS-2700-4h.Describe whether and how the concessionsites are susceptible to wind damage.

Fire Prevention

Refer to Clauses III.E and III.F of FS-2700-4hregarding fire prevention requirements. TheAOP should address how the concessionaireshould report fires, and the concessionaire'sresponsibility for fire tools and equipment andfire suppression.

Butane and Propane Installations

Refer to Clause V.G of FS-2700-4h, whichapplies if the concessionaire is allowed toinstall butane or propane tanks. Specify anyapproved sites for these installations.

Refer to Clause III.G of FS-2700-4h for thefollowing three items.

Grizzly Bear, Black Bear, Cougar, andOther Predators

The AOP should address any restrictions onuse due to grizzly bears, black bears, cougars,or other predators; and safety requirements forthe concessionaire, such as firearms.

Diseases (Hantavirus and Plague)

The AOP should address the history of andprocedures for infestation areas that wouldaffect a concession.

Rodent Control

The AOP should address procedures forrodent control, including type, use, and timingof treatments and disposal of carcasses. Itshould also address proposed rodent controltreatments. Include appropriate provisions forprotection of National Forest Systemresources.

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Herbicide/lnsecticide Use

Refer to Clause V.D of FS-2700-4h. Theprospectus should cite any restrictions onherbicide and insecticide use, such as type,use, and timing of treatments; disposal ofwaste products; and any certifications that arerequired. The AOP should address proposedherbicide or insecticide treatments. Includeappropriate provisions for protection ofNational Forest System resources.

Construction Safety

Refer to Clause III.G of FS-2700-4h. The AOPshould describe appropriate constructionsafety standards.

Boating Safety

The AOP should address restrictions andrequirements that apply to boating safety,including certifications required for providingservices.

Advertising

The concessionaire must address proposedadvertising in the AOP, in conformance withClauses II.H and Vll.B of FS-2700-4h.

Signs and Posters

Refer to Clause II.H of FS-2700-4h. The AOPshould address who Is responsible for furnish-ing signs and posters. The FS is responsiblefor providing all Title Vl signs and posters.Describe required signs and sign standards.Content, location, and quantity of signs andposters must be approved by the FS.

Proposed Operating Plan Provisions

This section identifies operational aspects ofthe concession that are not standardized andthat therefore may vary by applicant. Requireapplicants to submit proposed operating planprovisions that respond to each of the itemscovered in this section of the prospectus. Forsome items, the prospectus will specifyminimum requirements and allow

Chapter 3: The Prospectus

Development of a Prospectus: Proposed Operating Plan Provisions

Hours of Operation

Specify the minimum hours that the sites mustbe open, including daily hours of operation for allsites, fee booths, and visitors' centers. Indicatewhether extended hours may be proposed.

Cleaning and Maintenance

Specify minimum standards for cleaning andmaintenance. In developing these, refer to thestandard performance evaluation form containedin Appendix 7A (pages 7 - 4-7). Have applicantsdescribe how the facilities and surrounding areaswill be cleaned and maintained to thesestandards. Have applicants address refusedisposal, toilet pumping, and other periodiccleaning.

Emergency Response

All emergencies at concession sites should bereported to local authorities. In this section, askapplicants to describe how they will respond toemergency situations, how they will provideinformation and assistance to the public, andhow they will handle public criticism ofemergency response. Applicants should showhow hours of operation, communications, andemployee training and supervision will beintegrated in these situations.

Law Enforcement

The FS, state and local law enforcementofficials, and the concessionaire each havespecific enforcement roles at concessions.(Refer to Appendix 8E for a detailed discussionof this topic.) Specify the respective enforcementresponsibilities of the FS, state and localofficials, and the concessionaire. Discuss anyissues or requirements that may affect the costof concessionaire enforcement responsibilities,including enforcement of site capacities. Askapplicants to address how they will fulfill theconcessionaire's role and responsibility for lawenforcement, including rules of use they willimpose at the sites.

3 - 16

Customer Feedback

Ask applicants to specify how they will handlecustomer complaints.

Other Required Services

Describe any additional services that are required.

Optional Services

If any of the items in this section are consideredessential, move them into the section on requiredservices. List requirements for optional servicesand the minimum standards that apply. These mayinclude interpretive services, law enforcementpatrols, and rental of equipment such as boats andbicycles. Specify that if the FS selects an applica-tion that includes optional services, they will beincluded as required services in the APO.

Interpretive Services

Describe any requirements for interpretive orenvironmental-education programs or materialswithin the permit area. Ask applicants to describehow they will enhance the visitor's enjoyment of theNational Forests, and what kinds of information theywill provide. (See Appendix 8C, pages 8 - 5-7, forfurther details.)

Communication Systems

The concessionaire is responsible for commu-nication systems needed for concession operations.Describe communication equipment or services thatapplicants may propose. FS radios and frequenciesmay not be used by concessionaires under anycircumstances.

Managing Non-Fee Sites

Management of non-fee sites may be required for aconcession with multiple sites. If so, include thisitem in the section on required services, anddescribe any applicable requirements. Managementof non-fee sites may also be proposed as anoptional service. If so, describe which sites may beincluded. In either case, identify any conditions theconces-

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Chapter 3: The Prospectus Development of a Prospectus: Over Req. Submissions t Eval. Criteria / Permit-lssuance Prerequisites / Appendices & Other Doc's

an FS-6500-24 for that period, request twofiscal years of projected financial statements,compiled by a CPA using the forecastmethod.

Miscellaneous Submissions

There may be additional requiredsubmissions, depending on the concession.

Evaluation Criteria

Enumerate the criteria and their relativeimportance, and discuss the rating method to beused, as developed in the application evaluationplan. State the minimum fee in the criterion onFee to the Government.

Prerequisites to Issuance of a Permit

Enumerate prerequisites to issuance of a permit.State that H these prerequisites are not metwithin 30 days of the date of the selection letter,a permit will not be issued to the selectedapplicant, and that the applicant that receives thenext highest rating will be selected for a permit,subject to a FAD and other prerequisites topermit issuance specified in the prospectus.

Prerequisites to permit issuance should include:

4 A determination of financial ability.

4 A special-use permit, executed first by theselected applicant and then by the FS.

4 An annual operating plan, completed andsigned by the selected applicant andsubmitted to the FS for approval.

4 An annual agreement for any G-T fee offsetwork required by the FS, executed first by theselected applicant and then by the FS.

* Meeting all insurance requirements.

* Meeting all bonding requirements.

* Making any required deposits and advancepayments.

* Obtaining any required certifications, andmeeting any other prerequisites.

Appendices and Other Documents

Following are a list of mandatory and optionalappendices to the prospectus, a list of documentsthat are available to applicants upon request, and alist of documents that should be sent to theselected applicant. Other mandatory and optionalappendices may be attached to the prospectus.

Mandatory Appendices

* Form FS-2700-4h, Special-Use Permit forCampground and Related Granger-ThyeConcessions. * Annual Operating Plan Outline * Annual G-T Fee Offset Agreement * Sample Holder M&R Plan * Facility and Improvement Inventories “Operationof Federally Owned Drinking Water Systems” * Vicinity Map * Recreation Site Maps * Form FS-6500-25, Request for Verification. * Form FS-6500-24, Financial Statement'. * Standard Performance Evaluation Form forCampground and Related G-T Concessions. * Cost/Benefit Analysis for Conversion to aConcession Completed by FS (for NewConcessions).

Optional Appendices

* A Sample Business Plan * Sample List of Holder-Furnished Property * Sample Collection Agreement * Forest Orders that Apply to the Concession * Vegetation Management Plan

Documents Available upon Request

* EA and NEPA Decision Notice for theConcession Opportunity

* National Recreation Reservation ServicePlan (reserved)

* Accessibility Self-Evaluation and TransitionPlan

* Recreation Site Use Reporting Form* Cleaning Recreation Sites: An Update, August1995.

Chapter 5

Permit Fees and G-T Fee Offset

This chapter discusses establishing the permitfee, G-T fee offset, and permit fee payments.

Establishing the Permit Fee

Permit fees charged under Section 7 of the G-TAct have two components: the value of the useof Federal improvements, and the value of theuse of Federal land. (See FSM 2715.13 andFSH 2709.11.) A permit fee should becalculated based on all land and improvementsunder permit, even sites that do not qualify forcharging use fees under the Land and WaterConservation Fund Act.

The permit fee will be determined by competi-tion: applicants will propose the fee to theGovernment as a percentage of gross revenue.The FS will evaluate that percentage in light ofthe projected net revenue for the concession,submitted by the applicant in the applicant'sforecast of concessionaire income andexpenses.

The FS will establish a minimum fee in theprospectus in the Evaluation Criteria. sectionand in FS-2700-4h, clause IV.A. The minimumfee will be stated as a dollar amount in both theprospectus and the permit. The minimum feewill establish a floor for the fee proposed byapplicants, and for the permit fee paid by theholder. Although the permit fee will be proposedas a percentage of gross revenue, thatpercentage should equate to a value that atleast equals the minimum fee, and theconcessionaire will not pay a permit fee lessthan the stated minimum. For fee calculationpurposes, “gross revenue” is defined in FS-2700-4h,clause IV.B.

The following describes the process andrationale for establishing the minimum fee.

The FS is required by law to obtain fair marketvalue for the use of land and improvementsunder FS administrative control. Current feepolicy is contained in FSM 2715 and 2720. FSM2721.41 provides that FSH 2709.11, Chapter30, should be used to compute fees for usesthat involve primarily camping and picnicking(whether the facilities were developed by the FSor by non-Federal entities).

Several methods for determining fair marketvalue are discussed in FSH 2709.11, section31.1. These include appraisal, income,schedules, competition, and negotiation. Threemethods are proposed for establishing aminimum fee for G-T campground concessions.

Establishing a Minimum FeeBased on Appraisal

Appraisal is the most professional anddefensible, although the most expensive,method of valuation. See Chapter 5 of the PPVDesk Guide, “Step 2: Determining Whether aFormal Appraisal is Needed,” for a discussion ofappraisals. If available, appraisals should beused to establish the minimum fee for the use ofthe land and improvements. The capitalizationrate, or percentage applied to the appraisedvalue to determine the permit fee, should bebased on current market data.

If current market data are unavailable, Office ofManagement and Budget Circular A-25, whichimplements Federal statutory authority forcharging fees, provides that the 30-yearTreasury rate, also known as the long-termbond rate, may serve as the capitalization rate.As of July 1, 1997, the 30-year Treasury ratewas approximately 6.78 percent. Check thecurrent rate at the time of fee determination.Examples of minimum fee calculations follow.

Chapter 5: Permit Fees and G-T Fee Offset

Fee Component for the Use ofGovernment Land

Acres of land to be = 27permitted

Appraisal value of = $3,000 perland acre

30-year Treasury rate = 6.78 percent

Fee = value of land times Treasury rate

Fee = 27 x $3,000 x .0678 = $5,492

Fee Component for the Use ofGovernment Improvements

One approach to valuation is replacement costless all forms of depreciation:

Replacement cost = $1,000,000

Depreciation = 80 percent= $1,000,000 x .80= $800,000

Current value = $1,000,000 $800,000= $200,000

Fee = value of improvements times Treasury rate

Fee = $200,000 x 0.0678 = $13,560

Combined fee

Combine the components for the use of theland and the use of improvements to obtain theminimum fee: $5,492 + $13,560 = $19,052.

Establishing a Minimum FeeBased on Gross Receipts

Basing recreation concession fees on apercentage of gross receipts is a commonpractice for Federal as well as state agencies.If appraisals are unavailable, the minimum feemay be based on the three-year average ofgross receipts times the current 30-yearTreasury rate, as shown below.

Year Gross receipts

1994 $120,5001995 $125,6001996 $130,300

Average = $376,400 ÷ 3 = $125,467 x .0678 =8,506.66.

Establishing a Minimum FeeBased on a Schedule

An alternative to using the average of grossreceipts times the 30-year Treasury rate is todevelop a regional or market area schedule ofminimum fees, based on capitalization ratesfor comparable concessions on land managedby the FS, other Governmental entities, andthe private sector.

G-T Fee Offset

Once the permit fee is calculated, it may beoffset in whole or in part by the value ofGovernment M&R, as defined in FS-2700-4h,that is performed at the holder's expense. Thepermit defines “maintenance,”“reconditioning,”holder maintenance orreconditioning,” end “Government mainte-nance or reconditioning” as follows:

Maintenance is preserving; keeping in propercondition; or rebuilding, repairing, or replacing.Maintenance does not include construction ofnew facilities.

Reconditioning is restoring a facility to itsoriginal condition, or to meet current nationalor state standards, such as UFAS, ADMG, theUniform Building Code, or state water qualitystandards. Reconditioning does not includeconstruction of new facilities.

Holder maintenance or reconditioning ismaintenance or reconditioning that NEITHERMATERIALLY ADDS TO THE VALUE OFTHE PROPERTY NOR APPRECIABLYPROLONGS ITS LIFE. The work serves onlyto keep the facility in an ordinary, efficientoperating condition. From an accounting ortax perspective, it is work that may beexpensed, but not capitalized.

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Chapter 5: Permit Fees and G-T Fee Offset

Examples include but are not limited to interiordecorating, interior painting, vandalism repair,repair of broken windows, light bulb replacement,cleaning, unplugging drains, drivebelt replacement,preventive maintenance, lubrication of motors,greasing, servicing, inspecting, oiling, adjusting,tightening, aligning, watering, weeding, sweeping,waxing, refinishing picnic tables, routinehousekeeping, and general snow removal.

In fulfilling these responsibilities, the holder shallobtain any licenses and certified inspectionsrequired by regulatory agencies, and follow stateand local laws, regulations, and ordinances andindustry standards or codes applicable to thepermitted operation.

Government maintenance or reconditioning ismaintenance or reconditioning that ARRESTSDETERIORATION AND APPRECIABLYPROLONGS THE LIFE OF THE PROPERTY.From an accounting or tax standpoint, theexpenditures may be capitalized.

Examples include but are not limited to installing anew roof, new floor, or new siding; rebuildingboilers; replacing pipes, pumps, and motors;repairing or maintaining the paths, lands, walks,walls or landscaping adjacent to otherGovernment-owned structures; and performingexterior painting and refinishing. Exterior paintingthat repairs unsightly visual marks caused byeveryday use does not meet the definition outlinedabove.

Government maintenance or reconditioning,whether performed by the holder or the FS, is atthe sole discretion of the authorized officer.

(Appendix 5A, pages 5 - 6-7, contains a sample listof Government M&R projects.)

Alteration of Government Improve-ments during M&R

Any materials, equipment, or fixtures made a partof existing Government improvements duringholder or Government M&R become the propertyof the United States (see FS-2700-4h, clause II.E).However, it is unlawful for the FS to acceptconstruction of new facilities by the holder, just asit is inappropriate to use the cost of new construc-tion to offset the permit fee.

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If approved, new facilities built by the holder wouldbe owned by the holder, and therefore could not beincludedin the opportunity advertised in the prospectus. If thesenew facilities are an integral part of the operations, itcould be difficult to attract applicants, thereby reducingcompetition for the concession. If new construction isneeded at the site and FS funding is not available,consider including the site in PPV.

G-T Fee Offset Agreement andCertification

Before issuance of the permit and before eachsucceeding operating season, the FS and theconcessionaire should enter into an annual G-T feeoffset agreement that includes the list of GovernmentM&R projects and their estimated cost developed bythe FS and included in the prospectus. The agreementshould enumerate the portion of the fee that will beoffset by Government M&R and should specify whichprojects are to be used for offset that year. Theagreement should also specify whether theconcessionaire will be required or has the option toenter into a collection agreement with the FS toperform the work. (The G-T fee offset agreementshould not be confused with the holder M&R planreferenced in Chapter 3, which lists projects that arenot eligible for fee offset.)

The following is a list of additional provisions that mustbe included in any G-T fee offset agreement underwhich the holder will perform some or all or the work:

* Standards for completion of the projects.

* Examples of allowable costs, such as salaries andwages, travel, vehicles and equipment, materialsand supplies, subcontracts, and overhead directlyassociated with a G-T fee offset project.

* A statement that upon a determination by theFS that a project has been satisfactorilycompleted, the holder must submit documentationof its actual cost to the FS and must certify that therepresentations in the documentation are accurateand complete.

* A statement that the certification must be signedand dated, and must state that failure to sign thecertification will vitiate the fee offset claim.

Chapter 5: Permit Fees and G-T Fee Offset

* A statement that the FS will verify the

documentation before giving any fee offsetcredit.

* A statement that the FS reserves the right notto grant any fee offset if any of the representa-tions in the documentation are inaccurate orincomplete.

The G-T fee offset agreement should become apart of the permit. Appendix 5B, pages 5- 8-9,contains a sample G-T fee offset agreement.

Claims for fee offset must be documented usingFS-2700- _, “Granger-Thye Fee Offset CertificationForm.” This form requires the holder to itemize anddocument allowable costs directly associated witheach G-T fee offset project and to certify as to theaccuracy and completeness of the representationsin the documentation supporting the fee offsetclaim. The certification form is subject to all theprovisions in the fee offset agreement executed bythe FS and the holder. Appendix 5C, pages 5-10-11, contains a sample certification form.

Long-Term Government M&R

The FS must plan for replacement of its capitalimprovements. An M&R plan should be developedestimating the year for replacement of variouscomponents. If the cost of a project exceeds theamount of the permit fee eligible for offset in agiven year, establish a modified fee schedule foraccelerated G-T fee offset work.

Establishing a modified fee schedule foraccelerated G-T fee offset work allows enoughfunds to be collected in the first year of operationsto complete a large project. Establish the feeschedule so that there is a large fee payment thefirst year and a smaller fee paid in subsequentyears. For example, the minimum fair-market-value fee is $10,000 per year, and the permit termis five years. Develop a fee schedule that requiresan initial annual payment of $30,000 and foursubsequent annual payments of $5,000 per year.The larger payment must be made in advance, notin arrears.

Include the modified fee schedule as a separateevaluation criterion. (See Evaluation Criterion 7 inChapter 3, page 3-5.)

The cost of the project should be documented inthe G-T fee offset agreement. Either the holdermay perform the work, or the FS may perform thework under a collection agreement. If the FSperforms the work, the funds should be depositedinto a cooperative work account (FS accountingcode CWFS), and expended each year in thefollowing year.

2. FS Performs Work under CollectionAgreement

This second alternative allows the FS to obligateenough funds to complete a large project by theend of the permit term. When the FS anticipatesthat a Government M&R project will extendbeyond the current fiscal year, the FS may requirethat permit fees be paid into a cooperative workaccount (FS accounting code CWFS) under abinding collection agreement, in order for the FS toperform the work. To use the funds for financinglong-term Government M&R, the specific projectand its cost must be obligated each fiscal year forthe next fiscal year in the G-T fee offsetagreement (unobligated funds go to the Treasuryat the end of each fiscal year).

Offset for Concessions InvolvingMultiple Sites

All or part of the permit fee may be offset by thevalue of eligible MAR performed on the land andimprovements authorized under a G-T permit.Thus, if multiple sites are authorized under onepermit, the value of Government M&R performedat any site under the permit—even those thatgenerate very little of the permit fee—may be usedas offset. However, where multiple sites areauthorized under more than one permit, eachpermit fee may be offset only by the cost ofGovernment M&R performed at sites under thecorresponding permit.

Collection Agreements for G-T FeeOffset Projects

Collection agreements may be used for G-T feeoffset projects, i.e., the concessionaire may enterinto an agreement with the FS to pay the FS to

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Chapter 5: Permit Fees and G-T Fee Offset

perform Government M&R on the land andimprovements covered by the permit, and the valueof that work may be used to offset the permit fee.Collection agreements for G-T fee offset projectsmay be either optional or required. The FS mayrequire concessionaires at their expense torecondition and maintain the land and improve-ments covered by the permit. The FS has thediscretion to determine how that authority will beimplemented, including requiring the concessionaireto deposit money under a collection agreement forGovernment M&R performed by the FS.

The amount deposited in a given year under acollection agreement for G-T fee offset work shouldnot exceed the permit fee for that year. Therefore,avoid entering into collection agreements forGovernment M&R predicated on a certain level ofconcession revenue (i.e., agreements that theconcessionaire will pay the FS 50 percent of allconcession revenue over $100,000 for GovernmentM&R performed by the FS). In addition, collectionagreements for Government M&R predicated on acertain level of concession revenue may result inassessment of an inappropriate permit fee. Fees forG-T permits must be based on the value of the useof land and improvements under permit, rather thanon a percentage of revenue over a certainthreshold.

Chapter 6 discusses in more detail the legalparameters that apply to the use of collectionagreements.

Permit Fee Payments

Permit fees should be paid in accordance withrequirements in the permit and agency fiscal policy.These include:

* Payment in advance of the authorized use.

* Prompt reimbursement (as required by applica-ble law).

Payment should be required without demand. Thepayment schedule must be included in the

permit (see FS-2700-4e, clause IV.C). Follow theschedule below for permit fee payments. Where theestimated annual fee is $2,500 or less, all of thepermit fee should be paid in advance of theoperating season. Where the estimated annual feeis more than $2,500, a portion of the fee should bepaid in advance of the operating season, and theremainder over the course of the operating season.

Estimated # of FrequencyAnnual Fee Pavments

Through 1 Prior to opening$2,500

$2,501 - 3 Prior to opening, at$10,000 End of first 30 days,

And at mid-season.

Over Variable Prior to opening$10,000 and every 30 days

through operating* season.

Advance and interim permit fee payments shouldbe kept in a suspense account. The holder must bereimbursed for these fee payments up to theamount of any offset claims approved by the FSduring the operating season. The FS must reim-burse the holder within 30 days of approval of anoffset claim, unless the holder asks the FS to holdthe funds and apply them to the next fee payment.

At the end of the operating season, determine thefinal fee by reconciling fee payments as necessaryagainst actual concession revenue reported by theholder, in accordance with FS-2700-4h, clauseIV.D, and offset claims approved by the FS.(Appendix 8A contains a standard form for thecollection of use and revenue data. Concession-aires may use this form or provide the same data inan alternate format.)

Any excess of the final fee over the value of offsetclaims approved by the FS should be returned tothe Treasury. Funds in a suspense account may notbe obligated for future years.

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Chapter 6: Technical Issues

nature of the authorized activity and the degree ofattendant risk.

* The policy should require 30 days' prior writtennotice of cancellation (other than for nonpay-ment of premiums, which should require 10days' prior written notice).

* The policy should be an occurrence policy,rather than a claims-made one. Under anoccurrence policy, a claim can be made afterthe policy period has expired, as long as theloss occurred while the policy was in effect.Under a claims-made policy, a claim must bemade while the policy is in effect. Claims-madepolicies are unacceptable unless they have anextended reporting period. Check Section V ofthe policy to see if the insured has at least 60days to report claims after the policy hasexpired.

* A violation of a warranty in the policy should notvoid coverage.

* If claims are reduced by the cost of defendingthem, coverage should be increased commen-surately.

Liability Insurance

Permit Clause 111.1.1 of FS-2700-4h requires the holder to obtain liability insurance forany losses arising out of the holder's use andoccupancy of National Forest System lands. Seealso FSM 2713.32 and 2721.41.

Under FSM 2713.32, the minimum amount ofliability insurance coverage is $100,000 for injury ordeath to one person, and $200,000 for injury ordeath to two or more people. Check for anyRegional supplements that may have increasedthese amounts. If there is a need, higher limits maybe required. The actual amount of liability coverageshould be determined by the authorized officer, andin many cases may be significantly higher than theminimum requirements in national policy. Inexercising that discretion, the authorized officershould consider:

* The level of inherent risk associated with theuse and occupancy.

* The potential for an incident that may cause injury ordeath arising out of the use and occupancy.

* If such an incident were to occur, the potential forinjury or death to only one person, versus the potentialfor injury or death to more than one person.

Examples of accidents at concession campgrounds couldinclude trees felled by wind damaging automobiles orkilling people; a swimmer attacked by an alligator at adeveloped swim area; and a bear attack at a concessionsite. In cases involving death, multimillion-dollar claimsare not uncommon.

Casualty Insurance

Permit Clause 111.1.2 of FS-2700-4h requires casualtyinsurance for Government property covered by the permit,including the land and Government-owned improvements.The types of loss to be covered include but are not limitedto fire suppression costs, damage (including vandalism)to Government-owned improvements covered by thepermit, and to the extent provided in clause III.I.2, costsassociated with the release or threatened release ofhazardous material.

To ensure the rapid repair or replacement of essentialvisitor facilities, the holder will normally need to purchaseeither full-replacement or current-value coverage. Full-replacement coverage pays up to the dollar limit in thepolicy for the cost to restore or replace the damaged ordestroyed property, without deduction for physicaldepreciation. Current-value coverage pays up to the dollarlimit in the policy for the current value of the damaged ordestroyed property, taking into account physicaldepreciation.

Full-replacement coverage provides the greatestprotection to the Government and the public for repair orreplacement of needed facilities. However, full-replacement coverage may be expensive. Review theconcession feasibility analysis (or concession revenue, forexisting concessions) to determine whether theconcession income can support full-replacementcoverage. Current-value coverage may be an acceptablealternative, depending on the circumstances. In the eventof

Chapter 6: Technical Issues

catastrophic loss, the site will be evaluated forrebuilding. (See FS-2700-4h, Clause III.E.)

To determine an appropriate amount of coverage,evaluate which facilities are essential to theconcession, and the risk of damage to multipleimprovements, such as toilet and shower buildings.Determine replacement values for essential im-provements. Document the basis of propertydamage insurance, and attach a list of facilities andtheir replacement values to the permit.

Historic structures may be prohibitive in cost toreconstruct in kind. Insurance premiums mayexceed what could reasonably be expected to bepaid by the holder. In some cases, it may be best toreplace an historic structure with a modern building,which can accommodate the functions and capacityof the original structure.

The minimum amount of casualty insurancecoverage should be the value of the most expensivebuilding at the site. The authorized officer shouldrequire a higher amount where there is a high risk ofloss associated with the use and occupancy thatcould exceed the minimum.

Combined-Single-Limit Policies

Many liability insurance policies offer coverage thatdoes not have separate limits for personal injury ordeath to one person, personal injury or death tomore than one person, and third-party propertydamage. Rather, all three types of loss in theaggregate are subject to a single limit. A claim of upto that limit can be made for either type of loss, orboth types of loss combined. The insuranceprovided by such policies is known as combined-single-limit (CSL) coverage.

For CSL policies, the minimum amount of coverageshould equal the amount of coverage desired forpersonal injury or death to more than one personplus the amount desired for third-party propertydamage. Evaluate the risk associated with bothtypes of loss, and establish an amount of coveragethat is adequate for both. Thus if $200,000 isdesired for personal injury or death to more thanone person and $100,000 is desired for third-partyproperty damage, the CSL minimum should be$300,000.

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Insurance for Multiple Permits

If the holder is using one policy to insure more thanone permit, add a rider that lists each site and thatstates that each site is covered up to the dollar limitsin the policy.

Insurance for Permits Issued toStates

If the prospective holder is a state or one of itspolitical subdivisions, a risk assessment andinsurance policy may be required if the state or itspolitical subdivision has statutory or constitutionalauthorities limiting its liability or obligation toindemnify. See the user notes for Clause lil.l in FS-2700-4h.

Insurance for Permits Issued toFederal Agencies

If the prospective holder is a Federal agency,insurance is not required. Substitute languageshould be used that addresses limitations imposedby Federal law on assumption of liability by aFederal agency under the permit. See the usernotes for Clause lll.l in FS-2700-4h.

Administering Insurance Coverage

Adequate insurance coverage is a prerequisite topermit issuance; Within 30 days of the selectiondecision, the selected applicant must provide a copyof the insurance policy for the use and occupancy tobe authorized under the permit to the FS for review.

If the policy is included in the master policy list, ithas been reviewed by the FS, and a quickcomparison can be made with the master policy tocheck for any exclusions or endorsements thatmight affect required coverage. If the policy is notincluded in the master policy list, review the policy indetail, to ensure that it affords the requiredcoverage.

Proceeds recovered by the United States underliability insurance policies must be deposited into theTreasury as miscellaneous receipts. For casualtyinsurance policies, the FS has the discretion eitherto require the concessionaire to use all proceedsrecovered to repair, rebuild,

Chapter 6: Technical issues

restore, or replace damaged Government propertycovered by the policy, or to obtain payment of theproceeds from the concessionaire or the insurancecompany. (See FS-2700-4h, Clause 111.1.2.)Casualty insurance proceeds paid to the FS mustbe deposited into the Treasury as miscellaneousreceipts, rather than spent at the site to rectify thedamage.

Bonding

In the context of the agency's concession program,bonding is a type of guarantee that protects theUnited States against financial loss resulting fromdefaulted obligations associated with special-usepermits. A bond ensures obligations or paymentsassociated with these permits.

Do not use bonds to enforce general terms of thepermit. Rather, use bonds to enforce readilyidentifiable requirements that are specified in FS-2700-4h, Clause J. Also, do not use bonds as asubstitute for enforcement action under the permit,such as suspension or revocation. Bonding shouldnot be necessary for permit fee requirements, aspermit fees should be paid in advance of theauthorized use and occupancy. Bonding isparticularly appropriate to protect the United Statesfrom a complete default under the permit. (See FSM2344.2, item 4; FSM 2713.34; and FSH 6509.11k,Chapter 80, for direction on the use of bonding.)

The agency has the discretion to require bonding. Ifit is required, it should be addressed in theprospectus. The amount of the bond should besufficient to coyer the anticipated loss. For example,the bond may be based on the cost of operating thesites for the remainder of a season, the cost for anew holder to start operating, the amount of cash onhand required by the FAD, or the amount ofservices that the holder is committed to provide,based on reservations. If multiple permits arecovered by a blanket bond (see FSH 6509.11 k,sec. 81.2), the amount of the bond should besufficient to cover the anticipated loss under allpermits covered by the bond.

Review the economic-feasibility analysis to deter-

mine whether bonding should be required, and, ifso, an appropriate amount. It is the agency's optionto require bonding; however, it should be addressedin the prospectus. After a satisfactory operatingseason, the authorized officer may reevaluate theneed for, or reduce the amount of, the bond.

The bond should provide that at the agency’soption, the surety must pay the United States forany loss covered by the bond, or, in the event ofrevocation or suspension of the permit or completedefault under the permit, must pay a thrid party(NOT THE FS) to operate the concession. ANYBOND PROCEEDS RECOVERED BY THE FSMUST BE DEPOSITED INTO THE TREASURY ASMISCELLANEOUS RECEIPTS. THE FS MAY NOTUSE BOND PROCEEDS TO OPERATE THE SITE.

The bond should also provide that selection of athird party to operate the site is subject to FSapproval. Upon approval, the FS would issue atemporary permit to the third party to operate theconcession for a period up to the balance of thepermit term. After a new holder is in place, theoperational costs of the concession will be coveredby concession revenues. In addition, the new holderwill be responsible for all obligations under thepermit. Once the permit term expires, a newprospectus must be issued for the concession (seeFS-2700-4h, Clause J).

Type of Bond

A performance bond may be required to secureobligations imposed under the permit, in accord-ance with FS-27004h, Clause J. Either the FS willdevelop a performance bond form for special usesor adapt General Services Administration (GSA)Form SF-25, Performance Bond (see Appendix 6A,page 6-7). (Although GSA Form SF-25 is approvedfor use for special-use permits, before it can beused in conjunction with this desk guide, the FSmust obtain approval from GSA to modify the formto make it consistent with that use, and to allow theFS to require the surety to pay a third party tooperate the concession in the event of a completedefault.) The term of the bond should cover theperiod needed to secure obligations under thepermit, which typically would be the length of thepermit term.

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Chapter 7: Permit Administration

Termination

Termination is cessation of a permit by its termswhen a fixed or agreed upon condition, event, ortime occurs without any action by the authorizedofficer. See FS-2700-4h, Clause Vl.E. Examplesinclude but are not limited to expiration of the permitby its terms on a specified date (FS-2700-4h,Clause l.C) and termination upon change of controlof the business entity (FS-2700-4h, Clause l.H).Termination of a permit is not subject to appeal.

Claims against the Holder

Failure to pay permit fees is cause for revocation orsuspension of the permit. Outstanding paymentsbecome claims by the United States against theholder. Interest, penalty, and administrative-costprovisions in FS-2700-4h, Clauses IV.F and IV.G,apply to all delinquent debts. Interest is assessed inaccordance with the Debt Collection Act. Assess aminimum annual rate of interest on delinquent debtsthat is equal to the higher of the Treasury

current-value-of-funds rate or the prompt-paymentinterest rate in effect on the date the debt accrued.

The interest rate as initially assessed remains fixedfor the duration of the period of debt. To determinethe total due, add accrued interest and applicablepenalties and administrative costs to the principal tobe paid. Do not assess interest on interest,penalties, or administrative costs.

FSH 6509.11h, Chapter 20, and FS-2700-4h,Clauses IV.F and IV.G, contain additional guidanceon late payments and administrative offset.

Health and Safety Inspections

Depending on the nature of the authorized activitiesand improvements under permit, there may beagencies other than the FS that will conduct safetyinspections of various aspects of the concession,such as food service and boater safety. When suchinspections are conducted, include the findings fromthem in the annual performance evaluation.

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