Court Opinion

ID: 4286755
Source: CourtListenerOpinion
Date Created: 2018-06-21 16:02:14.018941+00
Date Added: 2024-06-11T14:09:02.032419
License: Public Domain

In the United States Court of Federal Claims
                                         No. 16-620C
                                    (Filed: June, 21 2018)

                                             )
 COUTURE HOTEL CORPORATE,                    )
                                             )      RCFC 12(b)(1), lack of subject matter
                       Plaintiff,            )      jurisdiction; RCFC 12(b)(6), failure to
                                             )      state a claim upon which relief can be
 v.                                          )      granted; Pre-Award Bid Protest; Bid
                                             )      Preparation and Proposal Costs;
 THE UNITED STATES,                          )      Breach of Implied-in-Fact Contract
                                             )
                       Defendant.            )
                                             )

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.

                                        OPINION

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
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 Lodging1 is 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.

                                                    2
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.

                                                    3
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)).

                                               4
        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).

                                                    5
        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 off-

base 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).

                                                   6
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

                                             7
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.

                                              8
       When plaintiff completed the renovations to the hotel in 2012, plaintiff sent an e-

mail 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

                                               9
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

                                               10
 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

                                              11
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

                                             12
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

                                              13
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

                                               14
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,

                                              15
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 implied-

in-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

                                              16
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

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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

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