A federal court ruled that the National Park Service breached a concession contract for ferry service by failing to ensure that the docks required for the ferry service were accessible. The concessioner held a Category III concession contract to provide ferry services in the Sleeping Bear Dunes National Lakeshore. The concessioner was required to run its ferry service from May 1 to early November each year. The Operating Plan for the concession contract stated that NPS “is committed to the upkeep and maintenance of the docks [] to ensure access by [the concessioner’s] vessels.”
NPS was aware that the sand around the docks needed to be dredged every four to five years. While NPS contracted with the United States Army Corps of Engineers to dredge the sand in the spring of 2020, COVID-19 prevented the dredging from occurring. As a result of the lack of dredging and damages to the docks due to high water, the concessioner was unable to operate in the 2020 season. NPS agreed that the concessioner was unable to operate due to the docks being inaccessible.
The court rejected NPS’s argument that the contract did not require NPS to dredge around the docks. The court held that “the plain language of the Contract imposes an obligation on the NPS to maintain the docks [] in a condition that ensures access” by the concessioner. Given that the concessioner needed a functioning dock and deepwater access to operate, the court held that NPS had a contractual obligation to ensure these two conditions existed even if dredging was required. The court also noted that the contract prohibited the concessioner itself from constructing any capital improvements on or around the docks. As a result, the concessioner was completely dependent on NPS for it to be able to operate the ferry service. The court also rejected NPS’s claim that the damage from the high water was an Act of God which excused NPS from its contractual obligation because the high water was foreseen by NPS. In addition, the court held that NPS was not protected by the contract prohibiting compensation if the contract was suspended because NPS’s negligence caused the need for a brief suspension.
