In the United States Court of Federal Claims

No. 16-620C

(Filed: June, 21 2018)

COUTURE HOTEL CORPORATE, 

 Plaintiff,

v.

THE UNITED STATES,

Defendant.

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RCFC 12(b)(1), lack of subject matter 

jurisdiction; RCFC 12(b)(6), failure to 

state a claim upon which relief can be 

granted; Pre-Award Bid Protest; Bid 

Preparation and Proposal Costs; 

Breach of Implied-in-Fact Contract

Jeremy D. Camp, Dallas, TX, for plaintiff. Michael S. Gardner and Eric P. Haas, Dallas, 

TX, of counsel.

Eric J. Singley, Civil Division, U.S. Department of Justice, Washington, D.C., with 

whom were Chad A. Readler, Acting Assistant Attorney General, Robert E. Kirschman, 

Jr., Director, and Douglas K. Mickle, Assistant Director, for defendant. Chris S. Cole, 

Trial Attorney, USAF Commercial Law & Litigation Directorate, Joint Base Andrews, 

MD, of counsel.

O P I N I O N

FIRESTONE, Senior Judge

Pending before the court is the motion filed by the United States (“the 

government”) to dismiss this action filed by Couture Hotel Corporation a/k/a Hugh 

Black-St Mary Enterprises, Inc. (“plaintiff”) under Rules 12(b)(1) and 12(b)(6) of the 

Rules of the United States Court of Federal Claims (“RCFC”) for lack of subject matter 

jurisdiction or, in the alternative, for failure to state a claim upon which relief can be 

granted. In its complaint, plaintiff alleges that in 2011 it purchased and renovated a hotel
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near Nellis Air Force Base (“Nellis AFB”), which is located in Las Vegas, Nevada, in 

order to participate in the off-base lodging business for visitors to the base when on-base 

Nellis Lodging1is not able to accommodate all visitors. Am. Compl. ¶¶ 1–3 at 1–3. 

According to plaintiff, it “understood and expected” that if its hotel met Nellis AFB’s 

requirements for off-base lodging and passed an inspection, Nellis Lodging would enter 

into a Memorandum of Understanding (“MOU”)2 with plaintiff, “enabling [plaintiff] to 

compete with other hotels for off-base lodging business for Nellis AFB.” Id. ¶ 18 at 7. 

Plaintiff alleges that in order to secure the MOU for the off-base lodging business, it 

“purchased the Hotel [in question] for $9,534,151.96” and “made modifications to the 

Hotel property in order to comply with the Nellis AFB requirements . . . expending 

$1,238,848.72.” Id. ¶ 21 at 8. After renovating the hotel to meet Nellis AFB’s 

requirements, plaintiff contends that Nellis Lodging refused to enter into an MOU,

claiming that Nellis AFB “was ‘not adding any new facilities to [its] MOU listing at 

[that] time.’” Id. ¶ 3 at 3.

Plaintiff states that Nellis Lodging’s refusal to enter into an MOU gives rise to two

claims. First, plaintiff asserts that Nellis Lodging failed to “conduct appropriate 

 

1 Nellis Lodging is a non-appropriated fund instrumentality (“NAFI”). The United States Supreme Court 

has described a NAFI as an entity “which does not receive its monies by congressional appropriation.”

United States v. Hopkins, 427 U.S. 123, 125 n.2 (1976). This court has jurisdiction over claims brought 

against NAFIs. Slattery v. United States, 635 F.3d 1298, 1321 (Fed. Cir. 2011).

2 The MOU in question was authorized by Air Force Instruction (“AFI”) 34-246, “Air Force Lodging 

Program,” dated October 29, 2008, according to which, “Air Force lodging operations, using [an MOU 

would] attempt to negotiate reduced rates for [commercial lodging] accommodations in order to provide 

eligible guests alternative lodging when adequate on-base lodging is not available.” AFI 34-246 ¶ 1.14 at 

10 (emphasis added). Importantly, AFI 34-246 stated that “[i]f no space [was] available on base 

[temporary duty] travelers ha[d] the option to accept a non availability number and find their own hotel.” 

Id. Most such travelers, however, were expected to accept the assistance offered by Air Force lodging 

operations “by going to one of [their] available [commercial lodging facilities.]” Id.
3

competitive procedures to procure . . . off-base lodging services” and further violated 

those procedures when it “preclude[d] [plaintiff] from competing for those services.” Id.

¶ 2 at 2. Plaintiff asserts that by using an MOU process and then failing to provide 

plaintiff with the opportunity to enter into an MOU to compete for off-base services, the 

government violated the requirements of the Competition in Contracting Act (“CICA”),3

10 U.S.C. § 2304, and various associated procurement regulations. Id. ¶¶ 37–38 at 13–

14. Plaintiff claims that in this litigation it is seeking the following as bid preparation and 

proposal costs: (a) $2,732,836.43 which covers the cost of purchasing the hotel less the 

amount plaintiff received from the subsequent sale of the hotel and (b) $1,238,848.72 for 

the costs plaintiff incurred in modifying the property to meet the MOU requirements. Id.

¶ 51 at 18–19.

Second, plaintiff asserts, in the alternative, that Nellis Lodging’s refusal to enter 

into an MOU resulted in a breach of an implied-in-fact contract between plaintiff and 

Nellis Lodging. Id. ¶¶ 53–57 at 19–20. Plaintiff alleges it “moved forward with the 

purchase and renovation of the Hotel . . . in furtherance of satisfying the Nellis AFB 

requirements needed to obtain the MOU.” Id. ¶ 54 at 20. Plaintiff contends that Nellis 

Lodging breached the implied-in-fact contract when it refused to add plaintiff’s hotel to 

 

3 CICA was passed into law in 1984 and set out a general requirement that executive agencies “obtain full 

and open competition through the use of competitive procedures” when “conducting a procurement for 

property or services.” Pub.L. No. 98–369, § 2711, 98 Stat. 494, 1175 (1984). CICA originally did not 

include a definition of “procurement,” but in 2011 Congress amended the Act to define the term. An Act 

to Enact Certain Laws Relating to Public Contracts as Title 41, United States Code, “Public Contracts,” 

Pub.L. No. 111–350, sec. 3, 41 U.S.C. § 111, 124 Stat. 3677, 3681 (2011). CICA now defines 

“procurement” as “all stages of the process of acquiring property or services, beginning with the process 

for determining a need for property or services and ending with contract completion and closeout.” 41 

U.S.C. § 111.
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its MOU listing for reasons not related to plaintiff’s failure to meet the criteria for an 

MOU, but because of Nellis AFB’s “‘budgetary climate.’” Id. ¶ 56 at 20. Plaintiff seeks 

the same damages it seeks for bid preparation and proposal costs for breach of the 

implied-in-fact contract. Id. ¶ 57 at 20.

The government, in its motion to dismiss, argues first that plaintiff’s claims for the 

above-stated bid preparation and proposal costs must be dismissed for lack of subject 

matter jurisdiction. Def.’s Mot. to Dismiss at 13–15; Def.’s Reply in Supp. of Mot. to 

Dismiss at 7–10. The government argues that plaintiff’s CICA and associated claims are 

barred under the Federal Circuit’s holding in Blue & Gold Fleet, L.P. v. United States, 

492 F.3d 1308 (Fed. Cir. 2007), because the plaintiff failed to timely object to the MOU 

process employed by Nellis Lodging to secure off-base accommodations. Def.’s Mot. to 

Dismiss at 14. According to the government, plaintiff needed to object to the MOU 

process before it sought to comply with the MOU by buying and renovating a hotel. Id.

at 15. The government argues that under Blue & Gold and its progeny, plaintiff’s 

objections to Nellis Lodging’s use and implementation of the MOU process were 

therefore waived. Id. at 13–15. The government further contends that the costs plaintiff 

incurred to meet the MOU requirements are not recoverable as bid preparation costs in 

any case. Id. at 11. According to the government, “‘[c]osts incurred in anticipation of’”

entering into a government contract are not “‘recoverable bid preparation expenses.’” Id.

(quoting Lion Raisins, Inc. v. United States, 52 Fed. Cl. 629, 631 (2002) (citing Coflexip 

& Servs., Inc. v. United States, 961 F.2d 951, 953 (Fed. Cir. 1992)) (other citations 

omitted)).
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Finally, the government argues that plaintiff’s alternative claim for breach of an 

implied-in-fact contract must be dismissed for failure to state a claim. Id. at 18–19. The 

government contends that a careful review of the amended complaint demonstrates that 

plaintiff has not alleged the facts necessary to establish an implied-in-fact contract. Id. 

To prove the existence of an implied-in-fact contract with the United States, a plaintiff 

must show “(1) mutuality of intent to contract; (2) consideration; (3) an unambiguous 

offer and acceptance[;] and (4) ‘actual authority’ on the part of the government’s 

representative to bind the government.” Schism v. United States, 316 F.3d 1259, 1278 

(Fed. Cir. 2002) (en banc) (citing City of Cincinnati v. United States, 153 F.3d 1375, 

1377 (Fed. Cir. 1998)); see also Trauma Serv. Grp. v. United States, 104 F.3d 1321, 1325

(Fed. Cir. 1997). The government argues that plaintiff has not alleged facts to meet the 

elements of mutuality of intent to contract, consideration, and lack of ambiguity in offer 

and acceptance. Def.’s Mot. to Dismiss at 18. Moreover, the government maintains that 

commitments made to plaintiff were not made by a person with actual binding authority. 

Id. In this connection, the government argues that plaintiff’s amended complaint is best 

read as stating a claim for breach of an implied-in-law contract based on principles of 

promissory estoppel. Id. at 5–8. The government maintains that this court does not have 

jurisdiction over implied-in-law contract claims. Id. See, e.g., Hercules, Inc. v. United 

States, 516 U.S. 417, 423 (1996).4

 

4 At oral argument, plaintiff conceded that this court does not have jurisdiction over implied-in-law 

contracts but argued that the factual allegations made in the amended complaint also give rise to a breach 

of an implied-in-fact contract claim. See Oral Argument at 11:32:00 a.m.–11:32:38 a.m. (May 15, 2018).
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For the reasons set forth below, the court finds that plaintiff’s bid protest claims 

regarding Nellis Lodging’s use and implementation of the MOU process must be 

dismissed for lack of subject matter jurisdiction and that plaintiff’s costs in buying and 

renovating the hotel are not recoverable bid preparation costs in any case. Second, the 

court finds that plaintiff has failed to state a claim for breach of an implied-in-fact 

contract. Accordingly, the government’s motion to dismiss is GRANTED.

I. Background Facts5

Nellis AFB is one of the largest Air Force bases in the world, where training is 

conducted together with air and ground units of the Army, Navy, Marine Corps, and Air 

forces from allied nations, and frequently hosts a substantial number of military 

servicemen and officers, along with their families. Am. Compl. ¶ 1 at 1.

To accommodate the large numbers of members of the United States military and 

other visitors, Nellis AFB provides temporary on-base lodging via Nellis Lodging, the 

Nellis AFB office responsible for providing on- and off-base lodging. Id. at 1–2. 

However, the demand often exceeds the capacity for on-base lodging. Id. at 2. As a 

result, Nellis Lodging has entered into agreements with Las Vegas area hotels for offbase lodging. Id.

In 2011, plaintiff “began exploring an opportunity to acquire the Hotel [in 

question], which was located in close proximity to Nellis AFB[,]” because plaintiff 

“believed that, under [plaintiff’s] ownership and management, the Hotel would be 

 

5 The following jurisdictional facts are taken from plaintiff’s amended complaint filed July 25, 2016 (ECF 

No. 9).
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uniquely positioned to provide Nellis AFB with off base lodging at the best location, best 

price, and with the best services.” Id. ¶ 13 at 5. Accordingly, plaintiff contacted Nellis 

Lodging to “inquire about the opportunity to provide lodging services to Nellis AFB and 

the procurement process required in order to do so.” Id. at 5–6.

In July and August 2011, plaintiff’s representatives met with Cathy Fierstein, 

Lodging General Manager of Nellis Lodging, about plaintiff’s “interest in competing for 

off-base lodging business.” Id. ¶ 14 at 6. Plaintiff “was surprised to learn that Nellis 

AFB did not utilize standard competitive procedures to solicit and award the lodging 

business such as an invitation to bid or request for proposal process.” Id. Ms. Fierstein 

explained that “Nellis AFB awarded off-base lodging business to hotels that met certain 

requirements and, after passing an inspection, signed [an MOU] with Nellis AFB[,]” 

which she claimed was justified because of the “tight lodging market in previous years.” 

Id. Ms. Fierstein also explained that the hotel plaintiff wished to purchase “was not, at 

that time, eligible to compete for the lodging business under the MOU procurement 

process because it did not meet certain requirements mandated by Nellis AFB.” Id. ¶ 15 

at 6. Ms. Fierstein told plaintiff that the hotel needed to be renovated to meet the MOU 

requirements “and, if it did so, it would then receive an MOU.” Id.

Following that meeting, plaintiff “requested a copy of the MOU which contained 

Nellis AFB’s requirements[,]” which it received on August 29, 2011. Id. at 6–7. The 

sample MOU stated that it “serve[d] ‘to establish a rate for government travellers on an 

as needed basis when lodging on base [was] fully occupied.’ In furtherance of that 

objective, the MOU provide[d] that the commercial hotel signatory ‘[would] furnish 
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lodging accommodations for Nellis AFB, Nevada on a rental basis’—at agreed rental 

rates to be specified in the MOU—and set[] forth ‘[t]he performance standards and 

requirements for these services.’” Id. ¶ 16 at 7. The sample MOU also provided that “a 

hotel [would] not be approved for an MOU unless and until it [met] certain requirements 

and passe[d] [the relevant] inspection[.]” Id. ¶ 17 at 7.

To take part in the “off-base lodging procurement process, [plaintiff] was required 

to purchase the Hotel [in question], make the necessary changes (physically and 

operationally) to comply with the MOU requirements, and have the property pass 

inspection.” Id. ¶ 18 at 7. Based on its discussions with Ms. Fierstein, plaintiff 

“understood and expected that the Hotel would receive an MOU—enabling it to compete 

with other hotels for off-base lodging business for Nellis AFB—once it met the 

requirements mandated by the Government.” Id. “Given Nellis AFB’s requirement that 

any hotels desirous of providing off-base lodging follow the MOU process, and 

[plaintiff’s] understanding that it would receive an MOU if it complied with the 

requirements specified by Nellis AFB, plaintiff undertook the activities necessary to 

prepare to compete for the lodging business.” Id. ¶ 20 at 8. Plaintiff therefore purchased 

the hotel it had identified to Ms. Fierstein for $9,534,151.96 and made the necessary 

renovations to meet the MOU’s requirements at a cost of $1,238,848.72. Id. ¶ 21 at 8. 

Plaintiff “would not have incurred those costs but for the necessity that it do so in order 

to participate in the MOU procurement process utilized by Nellis AFB and obtain the 

MOU purportedly necessary to obtain lodging business from Nellis AFB.” Id.
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When plaintiff completed the renovations to the hotel in 2012, plaintiff sent an email to Ms. Fierstein requesting a time and date for the inspection required under the 

MOU. Id. ¶ 22 at 8–9. Ms. Fierstein wrote back to plaintiff in an e-mail, in which she 

stated that Nellis Lodging was “not adding any new facilities to [its] MOU listing at 

[that] time.” Id. ¶ 23 at 9. According to Ms. Fierstein, “‘[t]he amount of business [Nellis 

Lodging] sen[t] off base d[id] not warrant the need for additional off base MOU’s [sic] at 

[that] time,’ and that ‘[u]nless the budgetary climate for the military improve[d] greatly in 

the near future, [she] d[id] not believe that [Nellis Lodging could] anticipate needing to 

add to [its] listing for the next year or two.’” Id.

As a result of plaintiff’s surprise by “Nellis AFB’s reversal of course on the MOU 

procurement process and its apparent refusal to allow [plaintiff] to participate in open 

competition for the lodging business, plaintiff requested “a formal administrative hearing 

regarding the Nellis AFB lodging procurement.” Id. ¶ 25 at 9. Nellis Lodging’s response 

to plaintiff’s request for a formal hearing was that “there [was] no requirement or 

mechanism to accommodate [its] request [for a hearing] because there ha[d] been no 

contract action on which to base [its] request[,]” maintaining that “‘there [was] not a 

contract in place by which’ the Nellis AFB lodging facility referred personnel to off-base 

hotels and, therefore, ‘there [was] not a competition requirement.’” Id. ¶ 26 at 9.

Ultimately, plaintiff had to file for bankruptcy because of the loss of “the 

anticipated revenue from Nellis AFB business,” and because it was “saddled with the 

additional costs and operating expenses imposed by compl[ying] with the MOU 

requirements[.]” Id. ¶ 30 at 10–11. The hotel “was placed into receivership” and “was 
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sold at a loss for $6,801,315.53 in order to mitigate [plaintiff’s] losses resulting from 

Nellis AFB’s refusal to follow the procurement process it had required or to even open up 

the off-base lodging business to competition.” Id. at 11.

Plaintiff filed the present action on May 25, 2016, and its amended complaint on 

July 25, 2016, seeking compensation for the purchase of the hotel and the relevant 

renovations it undertook to meet the MOU requirements, asserting claims under the 

court’s bid protest jurisdiction and contract jurisdiction. As also noted above, the 

government moved to dismiss the action on September 15, 2016.

Briefing on the government’s motion was completed on March 28, 2018. Oral 

argument was held on May 15, 2018.

II. Standard of Review

Similar to a motion to dismiss pursuant to RCFC 12(b)(6) for failure to state a 

claim upon which relief can be granted, when considering a motion to dismiss for lack of 

subject matter jurisdiction pursuant to RCFC 12(b)(1), “the court must accept as true all 

undisputed allegations of fact made by the non-moving party and draw all reasonable 

inferences from those facts in the non-moving party’s favor.” Westlands Water Dist. v. 

United States, 109 Fed. Cl. 177, 190 (2013) (cases cited therein). “If a motion to dismiss 

for lack of subject matter jurisdiction . . . challenges the truth of the jurisdictional facts

alleged in the complaint, the . . . court may consider relevant evidence in order to resolve 

the factual dispute.” Reynolds v. Army & Air Force Exch. Serv., 846 F.2d 746, 747 (Fed. 

Cir. 1988) (citing Land v. Dollar, 330 U.S. 731, 735 (1947)). When assessing a motion 

to dismiss for failure to state a claim pursuant to RCFC 12(b)(6), “unchallenged 
11

allegations of the complaint should be construed favorably to the pleader.” Hamlet v. 

United States, 873 F.2d 1414, 1416 (Fed. Cir. 1989) (citing Scheuer v. Rhodes, 416 U.S. 

232, 236 (1974)).

III. Discussion

A. Plaintiff’s Bid Protest Claim is Barred by Blue & Gold and its progeny

In the instant case, plaintiff argues that the government failed to comply with the 

provisions of the Competition in Contracting Act (“CICA”) and implementing 

regulations by using MOUs to secure off-base lodging instead of “the authorized 

competitive procedures[.]” Am. Compl. ¶ 38 at 13. Specifically, plaintiff argues that the 

government’s violation of CICA provisions was in connection with the procurement or 

proposed procurement of off-base lodging services from plaintiff. Id. ¶¶ 37–38 at 13–14. 

As such, plaintiff argues that the government’s decision not to grant plaintiff an MOU to 

compete for “off-base lodging business . . . was arbitrary, capricious, and not in 

accordance with law.” Id. ¶ 8 at 4.

The government argues that plaintiff’s bid protest must be dismissed because its 

bid protest claim is barred by the Federal Circuit’s decision in Blue & Gold and its 

progeny. In Blue & Gold, the Federal Circuit held that if an offeror who had the 

opportunity to timely object to an obvious error in the terms of a solicitation, but failed to 

do so, has waived the right to challenge that same error in a subsequent bid protest. Blue 

& Gold, 492 F.3d at 1313. In COMINT Systems Corp. v. United States, the Federal 

Circuit extended Blue & Gold to apply to all pre-award situations where the protesting 

party had the opportunity to challenge aspects of a solicitation before the award but failed 
12

to do so. 700 F.3d 1377, 1378 (Fed. Cir. 2012). Requiring a party to protest errors or 

ambiguities in a solicitation before award—or else waive the right to do so—rests on the 

policy that a party should not be allowed to “wait and see” if it has received the contract 

award before challenging the terms of the solicitation. Id. at 1383 (citing Blue & Gold, 

492 F.3d at 1314). The court in COMINT Systems reasoned that the policy behind Blue 

& Gold supported its extension to all pre-award situations where the party has the time 

and opportunity to raise its objections. Id. at 1382. In this case, the government argues 

that because plaintiff knew that Nellis Lodging used an MOU process and thus had the 

opportunity to challenge Nellis Lodging’s MOU process before incurring the costs of 

acquiring and renovating a hotel, plaintiff has waived its objection to Nellis Lodging’s 

use and implementation of an MOU process to secure off-base accommodations. Def.’s

Mot. to Dismiss at 13–15.

In response to the government, plaintiff claims that the waiver rule established in 

Blue & Gold is not applicable because, unlike the plaintiff in Blue & Gold, the plaintiff in 

this case was not responding to a solicitation. Pl.’s Resp. to Def.’s Mot. to Dismiss at 12. 

Rather, plaintiff objects to the process selected and the manner in which it was 

implemented. Id. at 12–14. Additionally, plaintiff maintains that Blue & Gold is 

inapplicable because “[p]laintiff is not seeking to enjoin the award of a contract or to 

reverse a contract award and restart the bidding process.” Id. at 13.

The court finds that plaintiff’s arguments are without merit and that, as the 

government argues, plaintiff’s bid protest claim must be dismissed under the waiver rule 

established in Blue & Gold. Under Blue & Gold, a plaintiff that “has the opportunity to 
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object to the terms of a government solicitation containing a patent error and fails to do 

so . . . waives its ability to raise the same objection subsequently in a bid protest action in 

the Court of Federal Claims.” Blue & Gold, 492 F.3d at 1313. A patent error is “an 

obvious omission, inconsistency or discrepancy of significance[.]” E.L. Hamm & Assocs. 

v. England, 379 F.3d 1334, 1339 (Fed. Cir. 2004). In determining whether a patent error 

exists, “the court must consider both what a reasonable offeror in the industry would 

know and even, to an extent, the offeror’s particular business acumen.” Jay Cashman, 

Inc. v. United States, 88 Fed. Cl. 297, 309 (2009) (citing Dalton v. Cessna Aircraft Co., 

98 F.3d 1298, 1305–06 (Fed. Cir. 1996); Helix Elec., Inc. v. United States, 68 Fed. Cl. 

571, 585 (2005)). Further, parties in a government contract action “‘are charged with 

knowledge of law and fact appropriate to the subject matter[.]’” Res. Conservation Grp., 

LLC v. United States, 96 Fed. Cl. 457, 466 (2011) (quoting Turner Constr. Co., Inc. v. 

United States, 367 F.3d 1319, 1321 (Fed. Cir. 2004), aff’d sub nom. Res. Conversation 

Grp., LLC v. United States, 432 F. App’x 975 (Fed. Cir. 2011)).

Here, plaintiff knew of the government’s procurement procedure early on during 

its discussions with Ms. Fierstein. Am. Compl. ¶ 14 at 6 (“Couture was surprised to learn 

that Nellis AFB did not utilize standard competitive procedures to solicit and award the 

lodging business such as an invitation to bid or request for proposal process.”). Indeed, 

plaintiff has conceded that it was aware of the grounds for protest it now asserts before it 

decided to acquire and renovate the hotel in question. Id. ¶¶ 14–15 at 6–7. In such 

circumstance, plaintiff had ample opportunity to challenge Nellis Lodging’s MOU 

process and to clarify what rights it would have under that process. By waiting until after 
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Ms. Fierstein informed plaintiff that Nellis Lodging would not be entering into any new 

MOUs, plaintiff waived its right to object to both the process and its implementation.

Plaintiff’s argument that Blue & Gold is inapplicable because Nellis Lodging did 

not issue a solicitation and because plaintiff is not seeking to set aside a contract is 

without merit. The Federal Circuit made clear in COMINT Systems that an offeror 

waives all pre-award objections to all claims associated with an acquisition process by 

not making a timely challenge. COMINT Systems, 700 F.3d at 1382–83. Where, as here, 

plaintiff argues that the MOU process was unlawful, it does not matter that Nellis 

Lodging had not issued a solicitation or that plaintiff is not seeking to set aside a contract 

award because the pre-award process encompasses the government’s selection of an 

acquisition process. Distributed Sols., Inc. v. United States, 539 F.3d 1340, 1346 (Fed. 

Cir. 2008) (noting that because the term “‘in connection with a procurement or proposed 

procurement[]’ by definition involves a connection with any stage of the federal 

contracting acquisition process, including ‘the process for determining a need for 

property or services[,]’ [t]o establish jurisdiction . . . [an offeror] must demonstrate that 

the government at least initiated a procurement, or initiated ‘the process for determining a 

need’ for acquisition” of goods or services). The court must therefore dismiss plaintiff’s 

bid protest claim for lack of subject matter jurisdiction.

Second, the court also agrees with the government that to the extent plaintiff’s bid 

protest claim challenging Nellis Lodging’s refusal to enter into an MOU with plaintiff is 

not barred, plaintiff is not entitled to the costs it seeks in any event under this court’s bid 

protest jurisdiction. Under 28 U.S.C. § 1491(b)(2), this court is authorized to issue two 
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forms of relief under its bid protest jurisdiction, an injunction and “bid preparation costs.” 

28 U.S.C. § 1491(b)(2). The costs plaintiff incurred in acquiring and renovating the hotel 

are not bid preparation costs. Plaintiff alleges that the costs it incurred and seeks to 

recover were necessary because the MOU was a “mandated step” in order to participate 

in Nellis Lodging’s procurement process for off-base lodging services, and thus the costs 

plaintiff incurred were necessarily bid preparation and proposal costs. See Am. Compl. ¶ 

51 at 18–19; see also Pl.’s Resp. to Def.’s Mot. to Dismiss at 9–11.

It is well settled that bid preparation costs are the costs incurred to prepare a bid 

and not those incurred in anticipation of receiving the contract. Section 31.205–18 of the 

Federal Acquisition Regulation states that “[b]id and proposal (B & P) costs means the 

costs incurred in preparing, submitting, and supporting bids and proposals (whether or 

not solicited) on potential Government or non-Government contracts.” 48 C.F.R. § 

31.205–18(a). In this connection, “[e]xpenses compensable as bid preparation costs are 

those in the nature of researching specifications, reviewing bid forms, examining cost 

factors, and preparing draft and actual bids[,]” not those from purchasing and renovating 

hotels. Lion Raisins, 52 Fed. Cl. at 631 (citing Finley v. United States, 31 Fed. Cl. 704, 

707 (1994); Power Sys.-Claim for Costs, B–210032; B–210032.2, 84–1 CPD ¶ 344, 1984 

WL 44014, at *1 (Comp. Gen. March 26, 1984) (“[C]osts are limited only to those 

expenses incurred in the preparation of the bid itself.”)). In such circumstances, “[c]osts 

incurred in anticipation of or to qualify for a contract award[,]” like in this case, “are not 

recoverable bid preparation expenses.” Id. (citing Coflexip, 961 F.2d at 953; Stocker & 

Yale, Inc., B–242568, 93–1 CPD ¶ 387, 1993 WL 181158, at *3 (Comp. Gen. May 18, 
16

1993)) (“Offerors may incur substantial costs in anticipation of, or in the course of, 

competing for a contract, without those costs thereby becoming proposal preparation 

costs.”). Thus, plaintiff’s costs of purchasing and renovating the hotel in question are in 

the nature of damages and would not be recoverable under this court’s bid protest 

jurisdiction as bid preparation and proposal costs even if the court had jurisdiction over 

plaintiff’s bid protest claim.

B. Plaintiff’s Implied-in-Fact Contract Claim Must Be Dismissed for Failure to 

State a Claim 

This court has jurisdiction to hear claims based either on an express or an impliedin-fact contract. Hercules, 516 U.S. at 423. A plaintiff’s allegation that such a contract 

exists between itself and the United States “is enough to confer subject matter jurisdiction 

in this [c]ourt.” Penn. Dep’t of Pub. Welfare v. United States, 48 Fed. Cl. 785, 786 

(2001) (citing Trauma Serv., 104 F.3d at 1324). However, if a plaintiff fails to allege 

facts sufficient to establish an implied-in-fact contract, its case may be dismissed for 

failure to state a claim. See, e.g., Harbert/Lummus Agrifuels Projects v. United States, 

142 F.3d 1429, 1434 (Fed. Cir. 1998); Hanlin v. United States, 316 F.3d 1325, 1328 (Fed. 

Cir. 2003) (noting that plaintiff has the burden of establishing an implied-in-fact 

contract); AAA Pharmacy, Inc. v. United States, 108 Fed. Cl. 321, 328–29 (2012) 

(granting the government’s motion to dismiss because plaintiff failed to allege the 

necessary elements showing a valid contract with the government).

In its motion to dismiss, the government maintains that plaintiff has failed to state 

a claim because plaintiff has failed to allege sufficient facts to establish an implied-in-fact 
17

contract with the United States. Def.’s Mot. to Dismiss at 18. Specifically, the 

government argues that plaintiff has not alleged sufficient facts to demonstrate a 

mutuality of intent and an unambiguous offer and acceptance, claiming that Nellis 

Lodging’s response to plaintiff’s interest in entering into an MOU was “mere interest,” 

which “does not establish a mutual intent to contract, or an unambiguous offer and 

acceptance.” Id. at 19 (quoting Pac. Gas & Elec. Co. v. United States, 3 Cl. Ct. 329, 339 

(1983)). Further, the government alleges that Ms. Fierstein, the Nellis Lodging manager 

with whom plaintiff communicated, did not have contracting authority to bind the 

government. Id. at 18.

In response, plaintiff asserts that the parties’ intent to contract can be inferred from 

the parties’ conduct. Pl.’s Resp. to Def.’s Mot. to Dismiss at 17. Specifically, plaintiff 

argues that Ms. Fierstein’s “representations and promises that [plaintiff] would receive an 

MOU[,]” together with the sample MOU given to plaintiff that “specif[ied] the 

requirements that [plaintiff] needed to meet,” demonstrate the government’s intent to 

contract with plaintiff. Id.; see also Am. Compl. ¶ 54 at 19–20. Plaintiff further argues

that “mov[ing] forward with the purchase and renovation of the Hotel [and] making it 

clear to Ms. Fierstein, its lender, and others that it was undertaking those efforts in 

furtherance of satisfying the Nellis AFB requirements needed to obtain the MOU” 

reflects plaintiff’s intent to enter into the MOU with the government. Id.

The court agrees with the government that plaintiff’s allegations are not sufficient 

to establish a claim based on an implied-in-fact contract. Even if every fact alleged by 

plaintiff could be proven, based on the facts alleged, plaintiff cannot prevail on its
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implied-in-fact contract claim that it was guaranteed an MOU before it owned a hotel or 

passed all of the necessary government inspections.6 The sample MOU stated that 

“[p]rior to this [MOU] being approved, a team comprised of, at a minimum, Lodging, 

Fire Protection, Office of Special Investigations (OSI), and Environmental Health 

personnel [would] inspect the facility.” Id. ¶ 17 at 7. In view of this language, Nellis 

Lodging could not commit to entering into an MOU with plaintiff when plaintiff met with 

Ms. Fierstein at Nellis Lodging before it purchased a hotel. To the contrary, the sample 

MOU makes plain that Nellis Lodging could only be contractually bound by a written 

agreement, i.e., the MOU, after the MOU requirements had been met and an inspection 

had confirmed that the hotel met Nellis Lodging’s standards. This court has recognized 

that “in negotiations where the parties contemplate that their contractual relationship 

would arise by means of a written agreement, no contract can be implied.” Pac. Gas, 3 

Cl. Ct. at 339. See also Essen Mall Props. v. United States, 21 Cl. Ct. 430, 439–40 

(1990); City of Klawock v. United States, 2 Cl. Ct. 580, 585 (1983), aff’d, 732 F.2d 168 

(Fed. Cir. 1984). As the Federal Circuit has explained, agency actions “do not produce a 

contract implied-in-fact until all steps have been taken that the agency procedure 

requires; until then, there is no intent to be bound.” New Am. Shipbuilders, Inc. v. United 

States, 871 F.2d 1077, 1080 (Fed. Cir. 1989). 

 

6 At oral argument, plaintiff conceded that the MOU did not guarantee any specific amount of off-base 

lodging business, but rather obligated the hotel to accept and provide such lodging at agreed upon rates

when such lodging was requested by Nellis Lodging. See Oral Argument at 11:29:06 a.m.–11:29:28 a.m. 

(May 15, 2018).
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In this connection, plaintiff’s reliance on Ms. Fierstein’s statements to suggest that 

the parties had entered into an agreement to enter into an MOU if plaintiff met the MOU 

requirements is misplaced. First, even plaintiff concedes that Ms. Fierstein’s statements 

were conditioned on plaintiff meeting the MOU requirements. If acceptance of an offer

“is in any respect conditional” or if it “reserves to the party giving it a power of 

withdrawal[,]” those representations and promises cannot be interpreted as binding on the 

United States. Uniq Computer Corp. for Benefit of U.S. Leasing Corp. v. United States, 

20 Cl. Ct. 222, 230 (1990) (quoting Corbin, Corbin on Contracts, A Comprehensive 

Treatise on the Working Rules of Contract Law § 264 (1963)). Ms. Fierstein’s statements 

to plaintiff, together with the delivery of the sample MOU, are therefore insufficient to 

create a binding contract because “[a] mere statement of intention . . . is not enough to 

manifest an unambiguous acceptance of an offer, especially when coupled with a 

condition precedent.” Essen Mall, 21 Cl. Ct. at 440. Thus, Ms. Fierstein’s statements 

and actions, even if true, do not evince the government’s unambiguous acceptance of an 

offer or an intent to be contractually bound. “A court will not . . . imply an agreement 

between parties when there was none, nor can a court imply privity when there was no 

meeting of the minds between the particular parties.” Carter v. United States, 98 Fed. Cl. 

632, 636 (2011).

Indeed, the Federal Circuit has noted that “it is irrelevant if the oral assurances 

emanate from the very official who will have authority at the proper time[] to sign the 

contract or grant,” because if the assurances are premature and “an approving official 

exceeds his authority, the government can disavow the official’s words and is not bound 
20

by an implied contract.” New Am. Shipbuilders, 871 F.2d at 1080 (citing Empresas 

Electronicas Walser Inc. v. United States, 650 F.2d 286, 223 Ct. Cl. 686, 688, cert. 

denied, 449 U.S. 953 (1980)). Regardless of whether Ms. Fierstein had the authority to 

sign the MOU on behalf of Nellis Lodging, she did not have the authority to bind Nellis 

Lodging in contract before the conditions of the MOU were met and thus could not have

contracted to guarantee that plaintiff would receive an MOU before purchasing and 

renovating a hotel as the plaintiff claims. At best, plaintiff was in negotiations for an 

agreement but had not reached an agreement. The court must therefore dismiss plaintiff’s 

breach of an implied-in-fact contract claim for failure to state a claim upon which relief 

can be granted.

CONCLUSION

For the reasons set forth above, the government’s motion to dismiss plaintiff’s 

complaint for lack of subject matter jurisdiction pursuant to RCFC 12(b)(1) and for 

failure to state a claim under RCFC 12(b)(6) is GRANTED.

The clerk is directed to enter judgment accordingly. No costs.

IT IS SO ORDERED.

s/Nancy B. Firestone 

NANCY B. FIRESTONE

Senior Judge