Witness Panel 1
Mr. Bruce SheafferNational Park Service
STATEMENT OF BRUCE SHEAFFER, COMPTROLLER, NATIONAL PARK SERVICE, DEPARTMENT OF THE INTERIOR, BEFORE THE SENATE ENERGY AND NATURAL RESOURCES SUBCOMMITTEE ON NATIONAL PARKS ON THE NATIONAL PARK SERVICE’S BUSINESS STRATEGY FOR OPERATION AND MANAGEMENT OF THE NATIONAL PARK SYSTEM
July 14, 2005
Mr. Chairman, thank you for the opportunity to appear before you at this oversight hearing on the National Park Service’s business strategy for operation and management of the National Park System, including development and implementation of business plans, use of business consultants, and incorporating business practices into day-to-day operations. The use of effective business practices to fulfill our core work is one of the key aspects of promoting management excellence, one of the Director’s five stated goals for the next four years. We have been moving on several fronts to adopt more business-like practices and we are pleased to share with the subcommittee our progress in this area.
One of the most important areas in which the National Park Service (NPS) is pursuing more business-like practices is in our budget formulation process—the process we use to determine the most effective and efficient allocation of funds requested in the President’s budget and appropriated to NPS by Congress. Over the past several years, we have adopted four new tools that are improving that process: the park scorecard, a core operations analysis, the budget cost-projection module, and business plans. In addition, the NPS is participating in the use of the Program Assessment Rating Tool (PART), a government-wide initiative that attempts to move agencies toward greater levels of budget and performance accountability. Examples of other areas in which NPS is engaged in more business-like practices include the concessions program, facility maintenance, the Department’s all-in-one business system, and competitive review processes.
The park scorecard NPS has developed is an indicator of each park’s financial, operational, and managerial health. In addition to serving as a management tool for the park superintendent, the scorecard is used to aid in the identification and evaluation of base budget increases for park units. It provides an overarching snapshot of each park’s current situation by offering a way to analyze individual park needs and to understand how parks are faring relative to one another based on broad, objective criteria. The current version of the scorecard has over 30 separate measures identified, all of which are grouped into four categories: financial management, organizational management, recreation, and resource management.
Although not yet fully developed, the scorecard played a role in the selection of parks for the additional FY 2005 operations funding provided by the Congress. The scorecard will be continually evaluated and expanded to meet park performance and budget needs and we anticipate that its use, in time, will aid NPS in evaluating all base programs, as well as incremental changes.
In addition to the scorecard, we have developed a core operations analysis process that integrates management tools to improve park efficiency. This process has been used successfully in the Intermountain Region, which has set a goal of reallocating resources equivalent to at least 10 percent of base funds to key activities and top park priorities. Each park within the region is seeking to: 1) achieve personal services and fixed costs equal to or below 80 percent of base funds; 2) pursue efficiencies based on cost-benefit analyses of alternatives; and 3) ensure that each park’s base budget relates to core operations and overall National Park System goals and priorities.
To achieve these goals, the Intermountain Region went through a multi-step process. The region:
• Undertook an exercise of projecting their costs into the future if they made no changes at all in organization structures, program delivery, distribution of personnel and resources, and management practices;
• Compared this projection with likely available funding and concluded that without any priority setting or improved management they would experience a shortfall in resources;
• Identified clear “purpose statements” for each park and identified each park’s priorities;
• Reviewed and analyzed the current allocation of personnel and resources by each activity, examining whether the activity was a core activity, legal requirement, desirable but not absolutely necessary, and determined whether FTEs could be eliminated or whether more FTEs were needed for that activity;
• Identified current and potential efficiencies that reduced costs per unit of output, avoided costs, generated cost recoveries, or eliminated lower-priority activities;
• Developed an action plan to implement the potential efficiencies; and
• Worked with employees to communicate, implement, and adjust the plan.
A sampling of the significant results generated by this effort includes:
• The region’s Cultural Resources Division reorganized three units into one functional organization, reducing FTE’s by 12, flattening the organization structure, and making possible a reallocation of over $1 million annually;
• Chickasaw National Recreation Area reorganized trash pickup in campgrounds to reduce the number of hours from 1,800 to 600, making possible a redirection of $37,020 to higher priority activities;
• Rocky Mountain National Park proposed to close one of six visitor centers, which would enable reallocation of three FTEs and over $40,000 to underserved core activities; and
• San Antonio Missions National Historic Site combined administrative and special projects officer positions with a reduction of one FTE and a possible reallocation of $100,000 to maintain needed ranger positions.
The core operation analysis process is designed to assist park management in making fully informed decisions on staffing and funding alternatives that tie to core mission goals. This will ensure that funds are spent in support of a park’s purpose, that funds are spent in an efficient manner, that a park’s request for funding is credible, and that there are adequate funds and staff to preserve and protect the resources for which parks are responsible.
Both the scorecard and the core operations analysis process are used in preparing park business plans. Business plans help parks to focus on operations, develop cost objectives, identify revenue sources beyond appropriated funds, and plan out the highest priority projects for the next three to five years. Our business planning has evolved and improved. Early generation plans tended to identify park activities and core needs; restructuring or changing service practices to achieve efficiencies; or developing strategies for meeting goals beyond seeking additional appropriations. Our business plans now provide a better roadmap and strategies for addressing priority needs and park goals.
As part of our business plan initiative, the Student Conservation Association, a nonprofit organization, sends graduate students from top business, environmental management and public policy schools across the country to work at park units during an 11-week summer internship. Over the last nine years, more than 200 students have participated in the program, with many of them now working full time at the park, regional, and national levels. With the help of the Student Conservation Association internship program, we will be able to complete 12 business plans this summer.
To assist park units in preparing business plans, we have developed, through a contract, an Electronic Performance Support System. This system supports consistency across the entire program through the use of a standardized template, reduces workload on existing park staff, and allows for archiving of business plan-related data. Through automation, the time needed to assemble and process data has decreased, providing more time during the summer for parks to develop a true action plan and to focus on financial strategies.
Park scorecards, the core operations analysis process, and the business plan initiative have been developed with built-in connections to the individual park’s goals, the NPS’ goals, and the Department’s Strategic Plan to assure that all business strategies and processes conform to the Government Performance and Results Act of 1993 (GPRA), which requires the utilization of budgetary resources to reach strategic outcomes and to measure our efforts to reach our goals against documented baselines.
Complementing these processes is the recent development of the budget cost-projection module, a tool that allows park managers to project the financial impact of decisions made today on future park budgets. Managers enter their assumptions regarding staffing (e.g. retirements, filling vacancies), pay and benefit changes, inflation, and the cost of meeting new program requirements over a five-year period. The system then provides a financial roadmap for the manager to determine the sustainability of their financial assumptions.
In addition to these measurement tools and methodology, the NPS is also participating in the use of PART, a government-wide initiative that attempts to move agencies toward greater levels of budget and performance accountability. PART is a systematic method of assessing the performance of program activities across the Federal government that was created and implemented by the Office of Management and Budget (OMB). It is a diagnostic tool used to improve program performance by reviewing overall program effectiveness, including program design and implementation and the ability to achieve results.
PART reviews have been completed, or are currently underway, on about seventy-five percent of the programs in the FY 2006 NPS budget request. The remaining programs are scheduled for review in 2006. All NPS programs which have completed PART reviews received acceptable scores except for Land and Water Conservation Fund State Grants, which received a “Results Not Demonstrated” rating due to a failure to demonstrate an adequate process for measuring performance and accomplishments. Both the Natural Resource Stewardship and the National Historic Preservation Programs received a score of 83 percent and were deemed moderately effective.
The NPS continues to work with OMB to develop performance measures for programs that have insufficient or inappropriate metrics in place and implement recommendations to improve program performance and efficiency. PART evaluations and recommendations continue to inform both budget formulation and program management decisions.
There are several other areas in which NPS has adopted more business-like practices in its operations. A critically important one is our concessions program, where business consultants have helped bring best business practices to our efforts and develop protocols that focus on the key processes of contracting and contract oversight in all concession contracts. We are also professionalizing our concessions work force; in fact, several of the business graduate students who have helped develop business plans have been hired by NPS for concession management positions. These practices are helping ensure that park visitors receive the best possible services. The concessions program is one of the NPS programs that is currently undergoing a PART evaluation.
Another key area where the adoption of business practices is demonstrating real results is in facility maintenance. As part of the President’s initiative to address the deferred maintenance backlog, NPS has, for the first time, developed an inventory of all facilities in eight industry-standard categories. We will complete comprehensive condition assessments of those facilities, for the first time, by the end of 2006. Those assessments will be critically important in future decisions about the most effective and efficient way to allocate maintenance dollars.
The NPS is also a full partner in the Department’s effort to implement an all-in-one business system – the Financial and Business Management System – that will not only replace all of its bureaus’ individual finance systems but will also encompass all other business activities such as procurement and travel, and make use of activity-based costing methodology as a tool for best practice identification and the strategic realignment of resources.
The NPS has improved its competitive review process by conducting preliminary planning with the assistance of outside industry expertise to ensure that we have the best, most efficient organization and operations in place. Significant benefits are being realized in terms of aggressive staff management, which include position review, replacing vacant park administrative positions with new business management positions, and determining to compete functions if they are found more efficiently performed in the private sector. One successful outcome of this process occurred at our Southeast Archeological Center, where operations were reconfigured to a more efficient workforce structure, saving an estimated $850,000 per year over five years. Another was at Natchez Trace Parkway, where facility maintenance savings resulting from a competitive review will save $1.2 million over five years. In both of these cases, by improving the management of these functions, the NPS employees were retained and the savings were kept by the park. Five areas began undergoing preliminary planning efforts in 2004. Another three parks are scheduled for preliminary planning this year.
Mr. Chairman, this concludes my statement. I would be happy to answer any questions you or other members of the committee might have.
Mr. Tom KiernanPresidentNational Parks Conservation Association
Thomas C. Kiernan
National Parks Conservation Association
The National Park Service’s Business Strategy for Operation
And Management of the National Park System
Subcommittee on National Parks
Committee on Energy & Natural Resources
United States Senate
July 14, 2005
Mr. Chairman and members of the Subcommittee, thank you for the opportunity to testify on the utility of business planning in national parks. I am Tom Kiernan, president of the National Parks Conservation Association. Since 1919, the nonpartisan National Parks Conservation Association has been the leading voice of the American people in protecting and enhancing our National Park System for present and future generations. Today we have 300,000 members nationwide who visit and care deeply about our national parks.
The subject of today’s hearing is of considerable importance to NPCA and we have been working to import the concept of business planning into the national parks and other protected areas for the past eight years. As you know, the concept for bringing this standard business tool to use in national parks was an idea that was hatched in Yellowstone in 1997, when Congress asked for documentation of how the superintendent arrived at a decision to close a campground due to funding problems. It took the park months to gather the needed paperwork and make its case satisfactorily. Through this experience, it became apparent that the park could use some strategic assistance from the business community.
The National Parks Business Plan Initiative was born the following year as a partnership between NPCA and the National Park Service with the support of several philanthropies in testing the use of business plans in a park environment. As partners, together NPCA and NPS approached the task by importing the talents of the best and brightest from business and public policy schools around the nation and focusing their talents on developing the business plans during their summer break, working hand-in-glove with park managers in the field. Over time, NPCA and NPS developed a comprehensive template for the business students to use that both harnessed existing park data and utilized the students’ insight.
The business plans the Park Service has been producing at many national park units provide important information about how well existing resources enable park managers and staff to accomplish their mission. This has been, and continues to be, an evolving program; the Park Service deserves credit for continuing to use and improve the business planning process. The Business Plan Initiative helps strengthen financial management capabilities at parks and facilitate meaningful dialogue about park needs. Every year the Park Service’s business plans get stronger, and the evolution of the program promises to continue delivering important benefits in the coming years.
It took several years to refine the program to the point that it appears today – a web-based system that assesses the human and financial capacity of parks to respond to their responsibilities in dozens of categories from concessions management to trails maintenance. The program now used by the Park Service is replicable by the parks on a regular basis and has the capacity to allow managers to track their progress towards addressing shortfalls and problems identified by the plans. The partnership between NPCA and NPS lasted for six years and in that time we completed 64 park business plans. In the past two years, NPS and the Student Conservation Association have completed 24 business plans for park – though seven of these plans are updated plans from parks that completed the process years ago. Once the plans being done this summer are published, we estimate that more than 25% of all units in the National Park System will have complete business plans.
Purpose of Park Business Plans
From the time that the concept was conceived in Yellowstone to today, business plans have been intended to serve a dual purpose: to provide parks with an effective external communications tool and to provide park managers with a useful management tool. In 1997, during the first business plan training session at the historic Lake Ranger Station in Yellowstone, the park managers participating in the program had an extended and prescient discussion about this dual role and the potential importance of business planning to the national parks. The conclusion in that meeting was that the communications role of business plans would be the role most used by the parks but the most important role of the business plans was their use as a management tool, providing the most long-term utility in helping park managers operate as effectively as possible, no matter the resources available. That observation remains true today and outlines both the problems that the Park Service has experienced and the promise that well-done business planning holds for the parks.
As a communications tool, the focus of the business plan program is on the product itself. Like no other product available to the Park Service (or most other federal or state agencies) business plans encapsulate the “business” of the park: what the park is about, it’s mission, focus, strategic direction, allocation of human and financial resources, additional resources needs, and opportunities for betterment. This is accomplished in a compressed period of time and expressed in a reader-friendly, open format. Parks have used the business plans to educate new staff, new management, and stakeholders of all kinds, from members of Congress to gateway community leaders. They have also proven useful as internal educational tools for NPS regional and national managers, giving parks that have completed business plan an advantage over others in arguing for the allocation of limited dollars distributed at the Washington and regional levels.
As a management tool, however, the focus and greatest benefit of the business plan program is in the process of business planning itself. The program today is “managed” and the product delivered by the business planning team in Washington, using student consultants in each park to produce individual plans. But development of each plan and the analysis behind it requires very heavy participation by the entire management structure of the park itself, and frequently requires the involvement of line staff as well. This process, though sometimes painful for the parks as they struggle to meet their existing responsibilities, forces a creative and useful interaction between business-focused bright young minds and more traditional park-focused staff. The result for many parks has been an infusion of energy and focus on core priorities by both management and staff and a clearer realization of the opportunities as well as challenges facing the parks. In short, it helps parks to define their forward focus and remind parks of their own core “business,” aligning mission priorities with the distribution of park human and financial resources.
Business Plans Reveal Trends
The plans examine funding and staffing trends, describe the history and growth of the parks, provide functional analyses, and identify strategic priorities and ways to more efficiently use scarce financial resources for the benefit of park resources and visitors. The plans typically examine five program areas: (1) resource management; (2) visitor experience and enjoyment; (3) facility operations; (4) maintenance; and (5) management and administration.
Importantly, the business plans have helped identify the park operational areas with the most significant needs, as well as produce a variety of recommendations and innovative solutions. The two functional areas generally shown to need the most attention throughout the park system have been resource protection and visitor experience and enjoyment, both of which are generally also the most under funded. Resource protection programs generally include collections, historic structures, and natural resources. Visitor experience programs generally include interpretation, education, and visitor safety.
Business Plans as the First – Not the Last – Step Toward Improvement
The success of business plans as tools for enhancing communications and management is tied very tightly to the understanding that business plans are the first step in a process of improvement – not the last step. In NPCA’s experience, there is a one-to-one correlation between parks that have had a successful experience with business planning and the superintendent and management team’s level of understanding of this principle. Park managers that see the document as the final deliverable and expect it to work magic for them by itself are always disappointed. Park managers that take the document with them wherever they go, have a coherent distribution plan, and take the resulting recommendations as the launching platform for defining practical and implementable strategies for improvement inevitably go on to achieve results that empower their staff and deliver both efficiencies and additional resources. The Park Service is now on a path toward repeating the business plan analysis accomplished in the parks in the early years of the program. This should prove to be an especially powerful next step as it provides an opportunity to actively measure progress.
NPS Use and Success with Business Plans
Business plans have enabled many national parks to identify and address issues that saved money, leveraged additional resources, and improved management, among other things. For example, Gettysburg National Military Park and the Eisenhower National Historic Site, two separate units overseen by one superintendent, completed their business plan in 2002. In the past three years, the park units have acted on a number of the business plan’s strategies for reducing costs and increasing non-appropriated funds. The park staff has implemented a Workforce Planning Strategy through which managers review every position as it becomes vacant to evaluate how critical those positions are to accomplishing the park mission. While this strategy does not help the park fill all necessary vacant positions, it does help them manage the vacancies better.
One of the greatest achievements was the combining of Gettysburg and Eisenhower operations: Park managers have eliminated positions that were dedicated to site management and maintenance of Eisenhower and have made those tasks collateral duty for Gettysburg staff. The estimated savings of $150,000 to $180,000 annually enables the park to cover other critical needs at Gettysburg that were threatened by diminished ONPS spending power.
At Golden Gate National Recreation Area in California, the park followed through with its business plan recommendation to increase visitor fees at Muir Woods, capturing an additional $700,000 annually; and the park has moved forward with transferring operating costs for building maintenance to third parties that occupy some of the many buildings in this former military base and improving energy conservation. The park has also leveraged its volunteer program; it now generates the equivalent work of 150 full-time equivalents a year.
At the conclusion of the business plan partnership between the Park Service and NPCA, however, it became quite clear that some parks had an easier time meeting the challenge of implementing the plans than others. In fact, many parks were approaching the challenge if implementing their business plans with a passive attitude that NPCA feared could lead to the end of a program with enormous potential for improving the national parks. After some investigation, we discovered that the reason for the passive approach expressed by some parks was a direct result of their not understanding how to implement the plans. Though the analytic resources were available to them for the purpose of developing the plans themselves, there were no tools available to help determine the next steps and which management strategies might be more successful than others. To respond to this, NPCA established the Center for Park Management to redouble our efforts on business planning – this time with an emphasis several critical areas: (1) helping parks follow through with their own business plans; (2) developing communications plans for parks; (3) helping park managers through the decision-making process regarding the steps to take in implementing solutions to needs identified in the plans; (4) identifying the management strategies most likely to produce the most beneficial results; and (5) helping to resolve any underlying staff or analytic challenges that impeded progress. In order to directly help the parks that were interested, CPM established consulting/client-type relationships with the parks and divorced itself from any role as a more active external advocate.
World-wide Utility of the Business Plan Concept
The National Park Service is by no means alone in thinking that business planning has a place in fostering the long-term health of parks. As NPCA’s Center for Park Management has focused on helping parks implement their business plans, we have also reached beyond the parks to develop business plans with more than a dozen national forests, a growing list of state park systems, and systems of protected areas abroad. The issues and pressures facing the parks – funding shortfalls, unclear priorities, and communications challenges – are not unique to America’s national parks. To the contrary, there are surprising parallels in every system with which we have worked, from New Mexico State Parks to the Red Sea parks in Egypt.
Business plans and other analytic and management tools are commonplace to the business of managing protected areas worldwide, and this concept can be helpful to park managers here and elsewhere. From generating efficiencies so that fee collection rangers can do more with their time and efforts at Virgin Islands National Park, to the reversal of a negative gateway community relationship at Fort Stanwix, to the creation of a marketing plan to increase visitation at Big Bend in the off-season, parks that implement their business plans experience material gains.
Lessons Learned and Future Opportunities
NPCA’s experience nationally and internationally with business planning allowed us to identify some of the limitations of the existing program and develop ideas for improving it. Our observations are as follows:
1. Many parks are using the business plans for outreach to stakeholder groups, but many more would benefit from more coherent planning to define the outreach message they want to convey, and to identify the audiences that may be the most helpful or strategic.
2. The business plan program remains a time-intensive program that ties the student consultants to data collection instead of analysis for the majority of their time. The program should be tweaked to allow much more time for analysis and identification of useful management strategies as well as some teaching of the managers to “open up” the analytic process and prepare them for moving toward implementation on their own.
3. The Park Service should find a means for staffing the business plan office in Washington or elsewhere with sufficient human resources so that the agency itself can respond to the needs of the parks as they move toward implementation. Through the Center for Park Management, NPCA has provided this service to date, but alone we have insufficient staff and financial resources to provide support to all of the national park units that need assistance.
4. The Park Service should construct a program that focuses on actively “mining” the data that has been generated by the business plan process. Standing behind every 30-40 page business plan is a pile of data and analysis. Focus on this could tell the agency and Congress much about the allocation of existing funds toward priorities, the balance of visitor-directed funds as compared with resource-directed funds, the unit cost of certain types of programs, and more.
5. Business plans themselves should be analyzed for common themes and strategies that emerge from the field and the common issues should then receive appropriate regional or national attention. This will allow for the development of common implementation strategies that work for both the individual park units and the more centralized managers. Fleet management and fee collection management are two areas that come easily to mind for us, as we have seen and worked on them with a broad variety of parks.
6. Park managers should start talking about their experience with business planning with other protected area managers outside of the National Park System. Business planning in one form or another is a increasingly popular tool in protected areas of all types, both in the United States and around the world. Rather than thinking only about their own experience with business planning, the Park Service should be actively seeking the experience of others – in the Forest Service, in state parks, in Australia, New Zealand, Canada, and elsewhere to identify best practices.
7. The Park Service should be actively evolving the business plan program to best meet the needs of park managers. Even the best-designed programs in business and government require constant updating if they are to remain vital, useful, and strategic. The Park Service should approach its efforts with business planning no differently, preferably with some insight to what works outside the Park System itself.
8. Together, the Park Service and Congress should establish a “venture capital” fund to invest in the analysis required to identify the best, most practical opportunities that save money for better, broader use by the parks, or generate or leverage funds best. It is a simple and true adage that sometimes it takes money to make money. It is no different in the Park Service – many parks need the financial resources to move ahead with business plan strategies that will save money now or generate more later.
9. Congress should ask for a periodic accounting of how additional funds are being allocated to business plan parks – and to the agency as a whole – as compared with the needs identified in those plans.
10. Finally, the Park Service should regard the business plan process and products as the single ripest opportunity to reach out to existing partners and develop new ones. The Director is absolutely correct in her statements that the agency can not survive without the assistance of many partners. The business plan process is a tool that is tailor-made for introducing parks to new potential partners and involving current partners. Currently, some parks see this clearly and others less so. National and regional emphasis is required to identify the cultivation of beneficial partnerships as a target goal of business plans.
Relation of Business Plans to Core Operations
The National Park Service has been developing a new core operations analysis that can be used to supplement and further inform the business plan process in the future, if done right. The Park Service has yet to finalize how the core operations process will or should work, so NPCA continues to watch this developing approach closely. As we understand it, however, we believe the new core operations approach can be useful in helping national parks prioritize how best to spend their limited funds in light of their core mission. This being said, it is essential that core operations analysis be used to inform and supplement, not replace, business planning. In addition, it will be important for the Park Service to develop a core operations process that is sufficiently flexible that it allows the mission and focus of particular national parks to evolve as we learn more about the treasures those parks preserve. For example, last year Congress, with the help of this subcommittee, passed legislation to expand Petrified Forest National Park. Among the primary purposes of that expansion was the realization that the park and surrounding areas are a world class paleontological resource. But when the park was first set aside, we only knew about the beautiful petrified wood that was there. In addition, core operations must ensure that park visitors have the best possible opportunity to benefit from Park Service interpretation of the resources and artifacts preserved in our 388 national parks.
The challenge for the Park Service is to continue to develop the program in a manner that maintains the focus on the needs of managers in the field, continually evolves to reflect lessons learned and best practices from within and outside the agency, and uses the information generated for productive, strategic purposes on a regional and national scale.
For ourselves, NPCA will continue to press for ways that the national parks can improve their management and efficiency, while advocating that the parks also receive the additional resources for which virtually every business plan demonstrates a need. Although many parks have room to improve their management efficiency, our extensive experience with business planning in the parks has made it clear that the shortage of needed fiscal resources lies at the root of many of the ills facing the parks today. As the subcommittee knows, the national parks face significant funding shortfalls.
Clearly, the national parks must make every dollar count, no matter the level of funding available, and we are working to ensure that the parks have the best tools and the right human resources to make sure of this for the future. But business plans, themselves, are not a panacea. Rather, they provide powerful tools to help lead the way to the fiscally sound, healthy, well-protected National Park System that Americans respect and deserve. For business plans to produce a long-lasting impact, Congress must use this tool to guide, and where necessary, make investments in park operations and maintenance, demand from the Park Service broader implementation of the plans’ recommended efficiency improvements, and help the Park Service extend and adapt the business plan process throughout the Park System. Thank you for the opportunity to testify. I am happy to answer any questions.
Mr. Flip HagoodSenior Vice PresidentStudent Conservation Association
Senior Vice President for Strategic Initiatives
& Business Development
Student Conservation Association
US Senate Subcommittee on National Parks of the Committee on Energy and Natural Resources
The National Parks Business Plan Initiative (BPI) is a creative public/private partnership designed to promote the long-term health of our national parks through development of improved financial planning and management tools. The BPI is collaboration between the Student Conservation Association (SCA) and U.S. National Park Service (NPS). Graduate students from leading business and public policy schools are placed in an internship by SCA as management consultants in selected national parks. The consultants work with park staff to produce a business plan that clearly outlines park operational requirements, identifies available financial resources that are currently available, and analyzes any funding gap that exists. Consultants also work with park staff to identify operational and investment priorities and develop strategies for meeting those needs. In addition, some parks that have produced business plans in the past are revisited to update their plans and/or perform various in-depth analyses to assist in program development. In the past two years, SCA has engaged 26 National Park units and placed 57 Business Planning consultants through this partnership.
SCA’s established relationship with educational institutions, introduces students to the BPI Program and its valuable career and life enhancing experiences. SCA assists the NPS with recruiting, site placement, training coordination, and administration. BPI consultants are recruited and selected by the NPS Business Management Group and SCA. They participate in an eleven-week program that typically begins the first week in June with a week-long orientation session in a national park and ends in mid-August. SCA administrative support includes logistical support for participant travel to trainings, facilitation of the orientation workshop, administrative and financial liaison with the consultant’s park site, and the planning and conducting of a fall wrap-up meeting held in Washington DC, where participants present their Business Plan Document. Finally SCA assist in the administration of program monitoring and evaluation as well conducting site visits directed at improving future program development and training.
Each consultant reports directly to their park’s supervisor, with oversight provided by NPS Business Management Group staff which additionally provides program leadership, technical guidance, and quality assurance focused on maintaining consistency of the analysis. Additionally, SCA staff is made available to the consultants for additional training, logistical support, and counseling. SCA also provides emergency management support for all consultants while they are in the field. Each park provides housing and office space.
Over the course of the summer, teams of consultants interview park staff and review budgets and other relevant documents. Consultants analyze the park’s programs, operations, and activities; identify standards of operation for each program; and develop financial and management strategies. Consultants produce business plans and utilize the online Business Plan Developer (BPD) system for data collection and presentation. At the conclusion of their internship, the teams of consultants present a report of their findings to park management.
Upon completion of the program the participants become SCA Alumni and through the NPS/SCA partnership we are also able to provide ongoing mentorship, career resources and counseling which has resulted in employment opportunities for program participants. Numerous BPI alumni from the 2004 Business Plan consultant group have accepted positions with the National Park Service. Other consultants have gone on to accept job placements with other public and private institutions introduced to them throughout the program as well as in follow-up career transitioning sessions. This has resulted in placements with such firms as Booz Allen Hamilton, Price Waterhouse Coopers and the General Accounting Office.
Mr. Geoff BaekeyPricewaterhouse Coopers
Geoffrey A. Baekey
Senior Manager, PricewaterhouseCoopers, LLP
Subcommittee On National Parks
United States Senate
July 14, 2005
Mr. Chairman and distinguished members of the Committee, I want to thank you for the opportunity to testify today regarding business practices within the National Park Service. I am Geoff Baekey, a Senior Manager at PricewaterhouseCoopers, and I work extensively with the National Park Service on business related issues.
Over the next few minutes, I would like to provide you with my perspective on how PwC has worked with the National Park Service to incorporate best business practices. Furthermore, I plan to provide you with specific examples of how the NPS has utilized these new practices to enhance their mission.
Since 2000, PricewaterhouseCoopers has been working closely with the National Park Service to enhance their concessions program. As you know, this is one of the largest business-based programs in the NPS, generating over $800 Million in gross revenues and serving millions of visitors. Back when PwC was first hired, the NPS faced a significant backlog of small and large concessions contracts. In addition, the Park Service was just beginning to implement changes resulting from a new law governing concessions. These major hurdles required a new way of looking at the business of managing the concessions program.
Initially, the NPS engaged PwC to complete a comprehensive review of the concession program. One of the major findings from this review was that the NPS needed to treat the largest and most complex of the concessions contracts with a much higher level of business and financial scrutiny than the smaller ones. PwC identified 50 contracts which necessitated this heightened set of business procedures.
From 2000 until today, PwC and the NPS have worked closely to develop detailed strategic contracting plans for the “big 50” contracts. This involved having a multi-disciplined team of experts (financial, legal, engineering, valuation, etc.) to assemble new contracts. Most of these new contracts have 10 to 20 year terms, so in essence, we were developing and implementing long-term business plans for visitor services with local park and regional support.
When we first commenced our work, PwC and their subcontractors were responsible for most aspects of the contracting process. Over time, however, NPS professionals have been taking on a greater share of the contract due diligence and prospectus development processes. One recent example of this is in the Intermountain Region.
The Intermountain Region has the greatest proportion of large concession contracts in the NPS. Over the past year, the Region has been recruiting and hiring managers with MBAs from top business schools or from recognized consulting firms to work in their business management division. In addition, the Region has been conducting on the job training with these managers to provide them with the tools they need to be effective in the field. Today, IMRO managers are taking on a more significant role in the contracting process for “big 50” contracts. With their strong business backgrounds, these professionals can handle overall project management, as well as much of the drafting of the prospectus documents.
The NPS is more than half-way through the contracting workload that they commenced in 2000. Much is left to be accomplished. However, with the introduction of new NPS business professionals, and the knowledge that has been gained by the NPS, the next few years should be very productive.
Another area where PwC has worked closely with the NPS is in business process improvement of concessions. With a new law and new regulations, the NPS engaged PwC to help enhance some of the procedures used to oversee the concessions contracts. In the private sector, we call this Asset Management. Mr. Chairman, the law that you passed in 1998 contemplated this need for enhanced oversight.
Once a new contract has been executed, much has to be done to provide quality control and compliance. Contract oversight activities include financial and operational reviews, environmental compliance, maintenance oversight and other compliance activities. One of the most significant activities is in the areas of Concessioner evaluation and rate approval. In 2003, the NPS engaged PwC to overhaul the concessions’ standards, evaluation and rate approval system, also known as SERA.
Much of the work on SERA involves attempting to instill private sector operating and facility standards to concessioner operated assets throughout the NPS. In fact, when PwC first started work on SERA, we tried to overlay industry standards and best practices to the large concession contracts. We found that this did not work. Park Service assets have unique characteristics which are not generally found in the private sector. For instance, many NPS locations are historic and require special consideration. Working closely with the NPS, PwC and others tailored best practices from the hospitality and travel industry for all asset types. The end result was a set of standards which can be used for objective evaluation and rate setting.
Perhaps the most important benefit of this contract oversight reengineering has been the close collaboration between the NPS, the concessioners and industry experts. Over the past two years, the NPS has formed a close-knit group of experts within and outside the Service whom can effectively address all necessary business and financial changes. The feedback from all involved has been very positive.
Over the past five years, the NPS concessions program has undergone dramatic change. This has been due in part to our efforts. But, the real change has come from within the NPS. Today’s NPS managers have a much better grasp of current business and financial best practices, and how this applies to their jobs. Perhaps most importantly, NPS managers now understand what needs to be completed within the Service and when they need to engage outside advisors.
Mr. Chairman, thank you once again for the opportunity to testify. I would be pleased to answer any questions that you or the Committee members may have.