NPS Issues Prospectus for a Concession at Lake Mead National Recreation Area

The National Park Service recently issued a prospectus soliciting proposals for boat tours and associated food services at the Hemenway Harbor area of Lake Mead National Recreation Area. This is between two sections of the Las Vegas Boat Harbor Marina Complex at the southwest end of the lake near Hoover Dam.

The draft contract requires that the concessionaire offer scheduled sightseeing boat tours ten months a year (December and January are optional) plus limited food, beverage, and convenience items on board. The concessionaire has the option of offering charters, night tours, and adding additional tour vessels.

The concessionaire must operate at least two daily tours, five days a week from March through October. During the shoulder seasons of February and November only one tour per day, four days per week is required. Additional tours and charters are permitted at the option of the concessionaire. A reserve and maintenance reserve of 3 percent, and franchise fee of 4 percent are required under the contract.

According to the prospectus, annual gross receipts during the last two years have been approximately $1.5 million, a reduction of about $125,000 compared to revenue generated in 2009. The NPS estimates annual revenues will remain at approximately the same level over the first three years under the new contract. The current concessionaire is not a preferred offeror, meaning it does not have the right to win the contract by matching the best offer of another bidder.

No offers were submitted for a similar prospectus that was issued last year. A major difference between the previous and current prospectus is the new version does not require the winning bidder to purchase the sightseeing vessel from the existing concessionaire. This change results in a substantially lower initial investment that is now estimated at $420,000, half of which represents personal property of the existing concessionaire.

There are several major issues to be considered by potential bidders. First, the winning bidder must provide a boat in order to offer the required tour service. The prospectus indicates the National Park Service will attempt to purchase the boat currently being used by the existing concessionaire. If successful, the boat will be assigned to the new concessionaire. This is not guaranteed, however.

Another issue relates to Lake Mead water levels. For three decades the reservoir fluctuated from between 1,180 to 1,220 feet above sea level. However, beginning in 2001, water levels dropped over 100 feet to 1,098 feet. While above-average snowfall during the winter of 2011-12 resulted in a temporary rise in the water level, a small current snowpack is expected to cause the lake level to again fall to near its old low level by September 2013.

Proposals for the contract must be received by the Pacific West Regional Office of the National Park Service by October 30. A one-day site visit has been scheduled for September 16, 2012.