STATEMENT OF JAMES DUFFUS III, DIRECTOR OF NATURAL 

 RESOURCES MANAGEMENT ISSUES, GENERAL ACCOUNTING 

 OFFICE; ACCOMPANIED BY JOHN KALMAR, STAFF MEMBER; 

 AND NED WOODWARD, STAFF MEMBER 



STATEMENT OF JAMES DUFFUS III 



Mr. DuFFUS. Thank you, Mr. Chairman. 



Mr. Hansen, Mr. Duffus, would you tell us who you have with 

 you please? 



Mr. Duffus. Yes, I will. With me today are Ned Woodward on 

 my right and John Kalmar on my left. They both have worked on 

 concession issues within the Office. 



Mr. Hansen. Mr. Duffiis, how much time do you need? 



Mr. Duffus. It takes me about five and a half — six minutes. I 

 will deliver a summary statement. 



Mr. Hansen. We will put eight minutes down on the thing, and 

 you know how that clock works in front of you. 



Mr. Duffus. Yes, I do. Thank you, Mr. Chairman. Mr. Chairman 

 and members of the subcommittee, we are pleased to be here today 

 to summarize our work on Federal policies and practices for man- 

 aging recreation concessioners and to provide our views on the four 

 bills now before the subcommittee. 



Our work has involved concessions activities at six agencies: the 

 National Park Service, Bureau of Land Management, Bureau of 

 Reclamation, Fish and Wildlife Service, Forest Service, and the 

 Corps of Engineers. 



In summary, our work has shown that the agencies' concession 

 policies and practices are based on at least 11 different laws and, 

 as a result, vary considerably; more competition is needed in 

 awarding concession contracts; and the Federal Government needs 

 to obtain a better return from concessioners for the use of its lands, 

 including obtaining fair market value for the fees it charges ski op- 

 erators. 



Each of the bills before the subcommittee proposes changes to 

 current concessions policies and practices. Overall, the changes pro- 

 posed are consistent with our past work, and, therefore, we support 

 their objectives. 



I will first highlight our earlier work and then provide our views 

 on the bills. No single law authorizes concession operations for all 

 six agencies. As a result, agencies have developed policies that dif- 

 fer substantially in terms of concession agreements and terms of 

 the agreements. 



Our work has also shown the need for greater competition in 

 awarding concession contracts. As early as 1975, we reported that 

 the Park Service's preferential right of renewal is not in the gov- 

 ernment's best interest because it impedes competition. Competi- 

 tion is impeded because existing concessioners who perform satis- 

 factorily have a right to continue their contracts. 



We have also reported that the concessions fees paid to the gov- 

 ernment appear to be low. As we reported in June 1991, the six 

 agencies received about $35 million in fees from gross concessions 

 revenues of $1.4 billion, an average return of about 2.4 percent. We 

 have updated these figures for the Park Service and the Forest 

 Service which are shown on the chart to my left. Concessions reve- 



