Concessions Contracting:

Governmentwide Rates of Return

GGD-96-86: Published: Apr 29, 1996. Publicly Released: Jun 5, 1996.

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Pursuant to a congressional request, GAO provided information on government concession contracting in 1994, focusing on: (1) the extent of government concession operations; (2) the amount of and factors that affect federal concession returns; (3) how federal concession return rates compare with other governments' return rates; and (4) whether agencies' non-commission income gathering operations could be converted into concessions.

GAO noted that: (1) 27 of the 75 federal departments and agencies surveyed had entered into concessioning agreements; (2) 42 of these agencies and agency components managed a total of 11,263 concessions programs; (3) 92 percent of these concession agreements were held by 6 land management agencies; (4) gross revenue from the concessions totalled $2.2 billion, but agencies lacked sufficient data to determine the gross revenues of all concession operations; (5) concessioners paid the government $82.5 million, including $64.6 million in concession fees and $17.9 million for facility repair and improvement; (6) concessioners provided the government with an additional $4.7 million in non-fee compensation by maintaining government property; (7) the government's return rate on concessioners' gross revenues was 3.6 percent; (8) other governments surveyed had average concession return rates of 12.7 percent; (9) competitively awarded concession agreements where fees were considered in the competition had higher return rates than those that were not competed; (10) although 96 percent of non-land-management-agency concessions were awarded competitively, only 8.6 percent of land management agencies concessions were awarded competitively; (11) the agencies able to retain more than 50 percent of their concessions fees had higher return rates than those agencies required to deposit their returns into treasury funds; and (12) 29 of the 75 agencies had income generating-operations other than concessions, but many of these activities could not be concession contracted because of security and privacy concerns.

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