## F I L E D United States Court of Appeals Tenth Circuit 

### MAY 11 1999 

### PATRICK FISHER Clerk PUBLISH
UNITED STATES COURT OF APPEALS

TENTH CIRCUIT

MORRISON KNUDSEN CORPORATION, dba MK-Ferguson Company, an Ohio corporation,

Plaintiff-CounterDefendant-Appellant/ Cross-Appellee,

v. FIREMAN’S FUND INSURANCE COMPANY, a California corporation,

Defendant-Appellee, and
GROUND IMPROVEMENT TECHNIQUES, INC., a Florida corporation, Defendant-CounterClaimant-Appellee/ Cross-Appellant. No. 97-1095
No. 97-1247

Appeal from the United States District Court for the District of Colorado (D.C. No. 95-OK-2510-RC)1 MK also sued Fireman’s Fund, GIT’s surety. While F ireman’s Fund is a

party to this appeal, there are no disputed issues peculiar to Fireman’s Fund, and its potential liability is entirely derivative of G IT’s. This opinion thus refers simply to “GIT.” -2- Daniel R. Frost, of Fairfield and Woods, P.C., Denv er, Colorado, (Neil T. Duggan and Brian D. Wallace, of Fairfield and Woods, P.C., with him on the brief) for Appellant/Cross-Appellee. Frederick Huff, Law Offices of Frederick Huff, Denv er, Colorado, for Appellee, Fireman’s Fund Insurance Company. Steven Roger Schooley, of Holland & Knight, LLP, Or lando, Florida, for Appellee-Cross-Appellant, Ground Improvement Techni ques, Inc.

Before SEYMOUR, Chief Judge , LUCERO, and MURPHY, Circuit Judges.

MURPHY , Circuit Judge.

Morrison-Knudsen Corporation (MK), a federal contra ctor, terminated its subcontractor, Ground Improvement Techniques (GIT), for an alleged default, and sued GIT for damages. 1 GIT counterclaimed for wrongful termination. GIT ’s claimed damages included payment for completed workunder the subcontract, equitable adjustments to the subcontract price for increased costs caused by MK, damages claimed by lower-tier subcontractors, and attorney’s fees. MK unsuccessfully moved for judgment as a matter of law, claiming insufficiencies in GIT’s evidence of damages and of MK’s liability. Ajury found the termination wrongful and awarded GIT roughly half the damages c laimed.-3-

On appeal, this court rejects MK’s challenge to the liability verdict but reverses the damage award. GIT’s evidence of sever al of its categories of damages was insufficient, and its claims on behalf of its lower-tier subcontractors were premature, as GIT had not yet itself settled w ith all of its subcontractors. Because the jury returned a general verdict, this c ourt cannot determine whether any parts of the jury’s award were for allowable categories of damages supported by sufficient evidence. We thus vacate the judgmen t and remand for a new trial limited to the issue of damages.
I. FACTUAL AND PROCEDURAL BACKGROUND The United States Department of Energy hired MK in 1983 to manage its Uranium Mill Tailing Remedial Action (UMTRA) projec t, a cleanup of radioactive mill tailings at sites around the count ry. MK subcontracted with GIT in March 1995 to clean up the Slick Rock, Colorado, site. GIT hired several lower-tier subcontractors (“subs”), including R.N. Robinson & Son, for excavation; Bogue Construction, for trucks; Keers E nvironmental, for asbestos abatement; and GA Western, for bridge work. The MK-GIT Subcontract (“the contract”) obligated G IT to complete the project by December 1996. The contract price was r oughly $9.3 million. The contract incorporated almost verbatim several stand ard federal clauses for fixedprice construction contracts, including clauses gov erning terminations for default and convenience. It also incorporated by reference the federal regulations-4-

governing the compensability of contractors’ costs in the event of a termination for convenience. The contract provided that the law applicable to government procurement would govern all substantive issues in any litigation. The project did not go well. GIT and its subs enco untered delays, difficulties, and increased costs. GIT attributed these to MK’s defective specifications, failure to timely secure permits, r igid interpretation of specifications and safety requirements, and propens ity to reject proposed work plans. During the contract’s performance, GIT requ ested extra compensation and extensions of time because of delays to, changes in , and increased costs of the work which GIT attributed to MK. GIT’s central the ory is that its plan to complete the project before the deadline displeased MK, who could not then earn the maximum possible fees from DOE. MK, in GIT’s v iew, thus sought to hinder and delay the work. MK, on the other hand, attribu ted the delays and increased costs to errors, omissions, and delinquencies by GI T and its subs. In September 1995 MK terminated GIT for default. T he contract allowed MK to do so if GIT was not prosecuting the work with a diligence that would ensure its timely completion. MK simultaneously su ed GIT for damages caused by its alleged default. While requiring GIT to cea se work and vacate the site, MK also directed it to perform certain cleanup work an d leave certain equipment behind. MK allegedly retained and used that equipm ent during the ensuing litigation. After the termination, MK denied almos t all of GIT’s requests for-5-

change orders to increase its compensation under th e contract. MK also failed to pay GIT for various parts of the completed work andfor the post-termination work and retention of equipment. GIT protested the termination and urged MK to let i t complete the project or bid on the reprocurement of the work. MK ignore d these requests. In February 1996 GIT counterclaimed for wrongful termination, s eeking damages in the form of payment for completed work under the contract an d compensation for additional costs occasioned by MK and not contemplated by the contract. Contemporaneously, the subs were demanding payment from GIT. After Keers filed suit, GIT settled its claims. At the t ime of the GIT-MK trial, however, GIT was still involved in litigation with Robinson and had not settled with or paid Bogue or GA Western. In its countercl aim, GIT also sought damages on behalf of the subs. The district court eventually set trial for Novembe r 1996. In October 1996 GIT supplemented its pretrial damages disclosure, i ncreasing the amount claimed from roughly $8.4 to $11.4 million and increasing the number of categories of damages. MK repeatedly but unsuccessfully challeng ed the supplementation, arguing that GIT had changed its damage theory justweeks before trial and was using previously undisclosed documentation. Twelve days before trial, the court assigned the ca se to a new judge. That judge presided over a three-week trial, which focus ed on whether MK’s2 A party must automatically disclose “a computation of any category of

damages claimed” and must produce for inspection al l materials on which it bases its computation. Fed. R. Civ. P. 26(a)(1)(C). A p arty must supplement or correct its disclosure upon learning that it is materially incomplete or incorrect. See Fed. R. Civ. P. 26(e)(1). A party who breaches those duties may not use any undisclosed material as evidence unless it proves that its failure to disclose was (continued...) -6- termination of GIT had been wrongful. GIT presente d one witness, its secretary/treasurer, Kip Cooper, to explain its dam age exhibits and claims. Before the court submitted the case to the jury, MK filed several motions for judgment as a matter of law under Federal Rule of Civil Procedure 50(a). MK made several challenges to GIT’s damage evidence. It argued, inter alia , that GIT had not presented evidence of the types of dama ges allowed by the contract, or of causation, or of its attorney’s fees. The co urt denied MK’s motions. MK also argued in a jury-instruction conference that t he contract barred GIT from recovering on behalf of subs whose claims GIT had n ot settled and paid. The court rejected MK’s proposed jury instruction to th at effect. The jury found the termination wrongful and awardedGIT $5.6 million. MK then renewed most of its motions for judgment as a matter of law under Rule 50(b), and the court denied them again.
II. DISCUSSION A. GIT’s Alleged Discovery Violation MK argues that GIT’s supplemental damage disclosure was subject to mandatory exclusion under Federal Rule of Civil Pro cedure 37(c)(1). 2 On appeal,2 (...continued)

harmless or substantially justified. See Fed. R. Civ. P. 37(c)(1).

3 MK urges this court to order a new trial on all iss ues in order to show litigants that it will not tolerate breaches of dis covery rules. MK baldly asserts that the alleged error in this case “rippled throug hout the entire trial and prevented MK from adequately presenting its best po ssible case.” But MK cites no authority to support, or provide standards for applying, its theory that a court of appeals should in some cases order a retrial of all issues because of allegedly pervasive prejudice caused by a discovery violationconcerning one issue.

4 The denial of a continuance is “reviewable only und er the standard of arbitrary abuse of discretion, upon a showing of manifest injustice.” United States v. Johnson , 909 F.2d 1440, 1441–42 (10th Cir. 1990) (citing United States v. Bradshaw , 787 F.2d 1385, 1392 (10th Cir. 1986)). This court will not reverse “unless we conclude that the denial was arbitrary o r unreasonable and materially prejudiced the appellant.” United States v. West , 828 F.2d 1468, 1469 (10th Cir. 1987) (citing Bradshaw , 787 F.2d at 1392). We have established several f actors to consider in reviewing the denial of a continuanc e. See West , 828 F.2d at 1470 (listing factors from Bradshaw , 787 F.2d at 1392). Facing this very deferential (continued...) -7- MK makes three arguments based on this alleged disc overy violation. Most broadly, MK asserts that GIT’s untimely change in d amage theory so prejudiced MK’s ability to conduct the trial as to require a n ew trial on all issues. MK also argues that the trial court abused its discretion i n denying MK’s motion to continue the trial to allow it time to respond to G IT’s disclosure. Finally, MK argues that the court abused its discretion in not striking GIT’s revised damages claim, thereby suggesting a need to remand for a ne w trial on damages. MK has not adequately developed its first two argum ents, which seek a new trial on all issues based on the prejudice of GIT’s disclosure 3 or on the trial court’s denial of a continuance. 4 As for its third argument, MK has consistently4 (...continued)

standard of review, MK does not even address the Bradshaw factors. It only asserts generally that the prejudice of having to r espond to GIT’s new damage theory was “obvious,” and that the denial of a cont inuance was “terribly unfair.”

5 In some cases the need to sanction a party for disc overy violations may be so clear and pressing that this court, in remanding for a new trial, would direct the trial court to sanction or consider sanctioning a p arty. See, e.g. , Summers v. Missouri Pac. R.R. Sys. , 132 F.3d 599, 605 n.7 (10th Cir. 1997). In this case, however, the record on appeal does not suggest thatGIT committed a flagrant or willful violation of the sort that might require a sanction on remand. Cf. Ryder v. City of Topeka , 814 F.2d 1412, 1427 (10th Cir. 1987) (holding that discovery violation was not so prejudicial as to require new trial, but remanding for trial court to consider disciplinary action or sanction). -8- emphasized the prejudice that it suffered in having to assimilate GIT’s allegedly new theory and documentation of damages mere weeks before trial. As discussed below, however, this court has determined that it i s necessary to vacate the award of damages and remand for a new trial on that issue . This appeal has thus eliminated any time-based prejudice and has essenti ally mooted any abuse in the court’s ruling. 5 Cf. Wylie v. Ford Motor Co. , 502 F.2d 1292, 1295 (10th Cir. 1974) (holding that remand for new trial obviated n eed to decide whether court had abused discretion in failing to impose discovery sanction). Even if GIT did untimely change its theory or disclose documents, this appeal and remand will have afforded MK ample time to investigate and rebu t GIT’s damage claims before the retrial.-9-

B. Liability MK makes but one argument which, if accepted, wouldrequire reversal of the liability portion of the judgment. It asserts that the court erred in denying a proposed jury instruction. The proposed instructio n specified that, in order to prove a delay “excusable” under the contract, GIT h ad to show both that something beyond its control delayed part of its wo rk, and that the problem would have delayed completion of the entire project.
1. The Applicable Law and the Instruction Given The contract’s default-termination clause, GP 56, i ncorporated essentially verbatim the standard federal Default clause for fixed-pric e construction

contracts. See 48 C.F.R. § 52.249–10 (1997). That clause is partof the Federal Acquisition Regulation System (FAR). See 48 C.F.R. pts. 1–99. As incorporated in the contract, the clause allowed MK to terminate GIT if the work had been delayed, not for excusable reasons, but by GIT’s la ck of diligence: A. If [GIT] refuses or fails to prosecute the work . . . with the diligence that will ensure its completion within the time spe cified in this Subcontract, including any extension . . . [MK] may. . . terminate [GIT’s] right to proceed . . . . B. [GIT]’s right to proceed shall not be terminated nor [GIT] charged with damages under this article, if: (1) The delay in completing the work arises from cau ses . . . beyond the control and without the fault or neglige nce of [GIT]. [A list of examples follows.]-10-

See 48 C.F.R. § 52.249–10. The clause further provide d that a wrongful defaulttermination would be treated as a termination for c onvenience: C. If, after termination . . ., it is determined that [GIT] was not in default or that the delay was excusable, the rights and obligations of the parties will be the same as if t he termination had been issued for the convenience of the Governme nt. The contract’s Disputes clause, GP 41, provides that “[a]ny substantive issue of law in [litigation concerning the contract ] shall be determined in accordance with the body of law applicable to procu rement of goods and services by the Government.” Accordingly, this court must i nterpret the above defaulttermination clause, and the rest of the contract, i n light of the regulations and case law governing the interpretation of federal contrac ts. The controlling regulations have since 1984 been the FAR. See 48 C.F.R. pts. 1–99; see generallyJohn Cibinic, Jr., & Ralph C. Nash, Jr., Administration of Government Contracts 14–22 (3d ed. 1995). The relevant caselaw has been devel oped mainly by the boards of contract appeals found in various federal departments; the Court of Federal Claims and its predecessor trial courts; and the Fe deral Circuit and its predecessor appellate courts. See generally id. at 22–23, 1239–41, 1311–16. The sole issue of liability at trial was whether th e default-termination was wrongful. By terminating GIT, MK indicated a belie f that GIT was so far behind schedule, without adequate excuse, as to show a lac k of diligence that made the project’s timely completion uncertain. The termination was proper if such a6 In an instruction unchallenged on appeal, the courtdirected the jury to find

whether GIT’s performance had made MK “justifiably insecure” about the project’s timely completion. -11- belief was reasonable. 6 In challenging the termination, GIT claimed that it had been entitled to extensions of time for various “ex cusable delays” under GP 56B. The jury’s general verdict simply indicated that itfound the termination wrongful. That conclusion may have depended on a finding thatGIT was entitled to one or more excusable delays. Any error in the instructio n defining excusable delays would thus prevent this court from affirming the ve rdict on liability. See City of Wichita, Kan. v. United States Gypsum Co. , 72 F.3d 1491, 1495 (10th Cir. 1996) (requiring reversal if jury may have relied on erro neous instruction in reaching verdict, even if such reliance is unlikely). MK has appealed the court’s refusal to give an instruction specifying that excusable delays had to threaten to delay completio n of the project as a whole. This court reviews a trial court’s refusal to give a particular instruction for abuse of discretion. See, e.g. , Webb v. ABF Freight Sys., Inc. , 155 F.3d 1230, 1248 (10th Cir. 1998). That deferential review is super seded, however, by this court’s de novo review of the instructions given to determine wheth er, in the absence of the refused instruction, they misstated the applica ble law. See, e.g. , United States v. Wolny , 133 F.3d 758, 765 (10th Cir. 1998); Wolfgang v. Mid-America Motorsports, Inc. , 111 F.3d 1515, 1526 (10th Cir. 1997). This courtreviews the7 The relevant part of instruction #22 is quoted in i ts entirety infraat pages

19–21, in juxtaposition to MK’s proposed instructio n. -12- instructions as a whole to determine whether they “ adequately apprised the jury of the issues and the governing law.” Wolny , 133 F.3d at 765. In this case, the court’s instruction #18, “Contrac tual Excuse of Delays,” told the jury that “[f]or each claim of excusable d elay, GIT has the burden to prove that it met the subcontract requirements for excusable delay.” The instruction noted that “[t]he subcontract requireme nts for establishing an excusable delay are explained in instruction 22.” Instruction #22, in turn, concerned “GIT’s Counterclaim for Extra Work, Delay s and Acceleration — Essential Elements.” That instruction told the jury what GIT had to prove in order to recover damages on its delay claims. It r equired GIT to show that something beyond its control or fault, and unauthor ized by the contract, had delayed its work; that it had notified MK; and thatMK had “refused to allow GIT the additional time necessary to complete the work. ” 7 MK proposed an instruction listing similar elements of excusable delay. MK’s instruction did not require proof that MK had “refused to allow GIT the additional time necessary to complete the work.” I t did, however, require proof that the delay was a “critical delay.” It defined a critical delay as one that “would delay not just the particular activity at issue, bu t the overall completion date of the Work.” The court declined over MK’s objection to give this instruction.-13-

MK argues that a contractor is not entitled to an e xcusable delay unless it proves that the delay was on the project’s “critica l path,” i.e., that it would delay completion of the entire project. MK thus asserts that the court erred “in refusing to instruct the jury on the element of ‘criticality .’” GIT responds that MK has not identified any part of the contract or any cases us ing the terms “critical path” or “criticality” or mandating jury instructions on tho se terms. Alternatively, GIT claims that the instructions as a whole were suffic ient. MK does not claim that the contract expressly refers to the “critical path ” or requires that excusable delays affect the project’s overall completion. Itargues instead that the latter requirement is a well-established rule of federal-c ontracting law. MK’s description of federal-contracting law is corr ect. The leading treatise explains that “[a] contractor is not entitled to re lief upon the mere occurrence of an event that qualifies as an excusable delay. The contractor must show that the event caused delay to the overall completion of the contract.” Cibinic & Nash,

supra , at 577 (emphasis omitted); see, e.g. , Essential Constr. Co. , ASBCA No. 18491, 78–2 B.C.A. (CCH) ¶ 13,314, at 65,122, 1978 WL 2282 (1978); AB-Tech Constr., Inc. , VABCA No. 1531, 82–2 B.C.A. (CCH) ¶ 15,897, at 78 ,823–11, 1982 WL 7201 (1982). A subsection of that treatise entitled “Delay of Overall Completion Required” discusses the case law establi shing that a contractor “is not entitled to an excusable delay unless it can prove that the time lost delayed the completion of the job. It is not sufficient to est ablish that some work was-14-

prevented; the work prevented must be work that wil l delay the overall completion of the job.” Cibinic & Nash, supra , at 579 (citations omitted); see generally id. at 579–80, 583–84. The two cases MK cited below and in its opening bri ef plainly state and apply the requirement MK sought to include in the j ury instructions, albeit without reference to the “critical path.” See Essential, 78–2 B.C.A. (CCH), at 65,122; AB-Tech , 82–2 B.C.A. (CCH), at 78,823–11. One of those op inions specifies that “persuasive evidence showing that [the delay] extended the overall completion of the contract work . . . is an essential element of the proof required to support a [claim for a] time extension.” Essential , 78–2 B.C.A. (CCH), at 65,124 (emphasis added). A third case that MK cite s in its reply brief plainly applies that requirement while using “critical path ” terminology. See Harrison Western/Franki-Denys (JV) , ENG BCA No. 5506, 93–1 B.C.A. (CCH) ¶ 25,406, at 126,586–87, 1992 WL 230234 (1992). In a recent opinion interpreting the default-termination clause at issue in this case, t he Armed Services Board of Contract Appeals acknowledged the potentially dispo sitive importance of the requirement that an excusable delay affect completi on of the contract as a whole:

The outcome of this appeal is controlled by the pri nciple that, where a contractor attributes its delayed performan ce to excusable causes, the contractor bears the burden of proving that time lost due to an excusable delay actually delayed completion o f the entire job. Appellant has failed to satisfy that burden . . . .-15-

D.J. Simons Constr. Co. , ASBCA No. 41336, 93–1 B.C.A. (CCH) ¶ 25,306, at 126,066, 1992 WL 187585 (1992) (citing Arctic Corner, Inc. , ASBCA No. 29405, 88–1 B.C.A. (CCH) ¶ 20,396, at 103,188, 1987 WL 461 55 (1987)). The parties’ dispute on this issue has been exacerb ated by MK’s use of “critical path” terminology in its proposed instruc tion. “Critical Path Methodology” (CPM) is a term of art for a method of scheduling and administering construction contracts. The Court of Claims has explained that CPM enables contractors performing complex projects to identify a critical path of tasks that must each be completed before work onother tasks can proceed. A delay on the critical path will thus delay the enti re project: Essentially, the critical path method is an efficie nt way of organizing and scheduling a complex project which consists of numerous interrelated separate small projects. Each subproj ect is identified and classified as to the duration and precedence of the work. (E.g., one could not carpet an area until the flooring is down and the flooring cannot be completed until the underlying electrical and telephone conduits are installed.) The data is then analyzed, usually by computer, to determine the most efficient schedule for the entire project. Many subprojects may be performed at any time within a given period without any effect on the completion o f the entire project. However, some items of work are given no leeway and must be performed on schedule; otherwise, the entire pro ject will be delayed. These latter items of work are on the “cr itical path.” A delay, or acceleration, of work along the critical path will affect the entire project. Haney v. United States , 676 F.2d 584, 595 (Ct. Cl. 1982); see also, e.g., Wilner v. United States , 24 F.3d 1397, 1398 n.5 (Fed. Cir. 1994) (en banc) (“‘[O]nly construction work on the critical path had an impac t upon the time in which the-16-

project was completed.’” (quoting C.M. Shupe, Inc. v. United States, 5 Cl. Ct. 662, 728 (1984))). Courts often use CPM to resolve disputes over excus able-delay claims. See Cibinic & Nash, supra , at 584. CPM provides a useful, well-developed nomenclature and analytic framework for expert test imony. While CPM has generated a technical terminology, the legal requir ement that it is used to analyze is general and commonsensical: a contractor must pr ove that a delay affected not just an isolated part of a project, but its overall completion. Courts often do not use formal CPM terminology, but simply an informal, CPM-like analysis to determine whether a contractor has met its burden o f proof on that general requirement . See id. MK’s proposed instruction comprehensibly conveyed that requirement by explaining that GIT had to prove that

[t]he delay was a “critical delay.” A critical del ay is one which would delay not just the particular activity at iss ue, but the overall completion date of the Work. Many activities may b e performed on a project at any time without any effect on the compl etion of the project. A delay in such non-critical activities w ill not delay the project overall and cannot constitute an excusable delay. Only delays to activities on the critical path — activities wit h no leeway in the schedule — may give rise to excusable delay. Contrary to GIT’s suggestions, MK has not argued th at GIT had to use, or that the court had to instruct the jury to use, for mal CPM analysis. The term “critical path” was simply appropriate, though not necessary, jargon in a proposed-17-

instruction that, as a whole, comprehensibly statedthe general requirement that an excusable delay must “delay the project overall.” MK’s proposed instruction thus accurately stated anapplicable rule of law which the court’s instructions did not expressly st ate. As a consequence, this court must determine whether the district court’s i nstructions, taken as a whole, nonetheless “correctly stated the governing law andprovided the jury with an ample understanding of the issues and applicable st andards.” Allen v. Minnstar,
Inc. , 97 F.3d 1365, 1368 (10th Cir. 1996). We have str essed that the instructions “must be read and evaluated in their entirety.” United States v. Denny , 939 F.2d 1449, 1454 (10th Cir. 1991). “‘[N]o particular form of words is essential if the instruction as a whole conveys the correct statement of the applicable law.’” Faulkner v. Super Valu Stores, Inc., 3 F.3d 1419, 1424 (10th Cir. 1993) (quoting Perrell v. FinanceAmerica Corp. , 726 F.2d 654, 656 (10th Cir. 1984)).
2. The Instructions as a Whole The court’s instruction #22 enumerated six elements of a compensable delay, and then required GIT to prove that MK refus ed it the additional time to complete the project that a delay made necessary:

GIT . . . must prove each of the following elements . . . : 1. GIT was delayed or accelerated in its performance ; 2. The delay was beyond the control of GIT; 3. The delay was without the fault or negligence of GIT;8 The court’s instruction #18, defining “excusable de lays,” cross-referenced

instruction #22 and incorporated its list of the el ements of a compensable delay. That is the list quoted in text. Elements 4–5 requ ired GIT to show that the contract did not authorize MK to cause a delay, and that the delay caused GIT to incur costs. Those requirements are only relevant to whether a delay was compensable , i.e., could entitle GIT to recover damages. They are irrelevant to the distinct question whether a delay was excusable , i.e., could entitle GIT to an extension of time for purposes of determining if th e termination was wrongful. See generallyJohn Cibinic, Jr., & Ralph C. Nash, Jr., Administration of Government Contracts 543–618 (3d ed. 1995) (discussing excusable and compensable delays); Margaret M. Worthington & Loui s P. Goldsman, Contracting with the Federal Government§ 11–8, at 392–93 (4th ed. 1998). For a federal contractor to be entitled to an equit able adjustment to compensate for costs due to a delay, it must prove that the delay was unreasonable and was the government’s fault. See Cibinic & Nash, supra , at 603. To obtain the lesser remedy of a time extension, however, the contractor need only prove that the delay was not foreseeable, within its own control, or due to its own fault. See generally id. at 543–52, 586–90, 603–07; see also Worthington & Goldsman, supra , § 11–8, at 393 (“Excusable delays entitle a contr actor to an increased period of performance. However, only excusable del ays that are caused by the government entitle the company to an equitable adju stment for increased cost due to the delay.”). Delays that are neither the contr actor’s nor the government’s fault, in other words, are excusable but not compen sable. See Cibinic & Nash, supra , at 543. The MK-GIT subcontract contained a stand ard federal clause governing compensable delays. See 48 C.F.R. § 52.212–12; see also Cibinic & Nash, supra , at 586–87 (discussing clause). When the court in corporated its list of the elements of a compensable delay into its ins truction defining excusable delays, it should have thus excluded elements #4–5. Its failure to do so, however, could only have prejudiced GIT, who has not challen ged it on appeal. -18- 4. [MK’s] conduct in causing the delay was not autho rized by the subcontract; 5. GIT incurred additional costs as a direct result of the delay; 8 and 6. GIT complied with the written notice provisions o f the subcontract [or proved an excuse for having failed to do so]. Before you may find that [MK] is liable to GIT unde r these elements for accelerating or delaying GIT’s perform ance, GIT must prove that [MK] accelerated or delayed GIT’s performance or-19-

required extra work of GIT, but refused to allow GI T the additional time necessary to complete the work. As noted above, the court’s instruction #18, defin ing “excusable delays,” incorporated by reference the above part of instruc tion #22. MK’s proposed instruction began with a similar listof elements. It differed, though, in that it listed the critical-path requirement as its final element, while it did not refer to “additional time necessary to complete the work”:

In order to prove that a given delay . . . was excu sable under GP 56B, GIT must prove . . . that: 1. The delay was unforeseeable. 2. The cause of the delay was beyond the control of GIT. 3. The cause of the delay was without the fault of G IT. 4. The cause of the delay was without the negligence of GIT. 5. GIT gave notice to [MK] of the cause of the delay within 10 days . . . . 6. The delay was a “critical delay.” A critical del ay is one which would delay not just the particular activity at issue, bu t the overall completion date of the Work. Many activities may b e performed on a project at any time without any effect on the compl etion of the project. A delay in such non-critical activities will not de lay the project overall and cannot constitute an excusable delay. Only del ays to activities on the critical path — activities with no leeway in th e schedule — may give rise to excusable delay. After carefully comparing the court’s instructions, taken as a whole, with MK’s proposed instruction, taken as a whole, this c ourt concludes that the district court’s description of the law, while not faultless , was not reversibly erroneous. We rely primarily on the final paragraph of the cou rt’s instruction, which required GIT to prove that MK had delayed its performance, y et “refused to allow GIT the9 The court’s list of six elements differed in minor ways from MK’s list of

five. The erroneous inclusion of elements of a compensable delay is discussed suprain note 8. The only other potentially significantdifference is that the court’s instruction did not require GIT to prove th at a delay was unforeseeable. This was the first element in MK’s instruction. Wh ile MK objected to this exclusion below, it has not done so on appeal. -20- additional time necessary to complete the work.” I f an otherwise-excusable delay did not affect the project’s overall completion, th e jury could have applied that paragraph, noted that no “additional time” was “nec essary to complete the work,” and thus concluded that GIT had not established an “excusable delay.” The court’s and MK’s definitions of excusable delayhad similar structures. The court’s “additional time” requirement and MK’s criticality requirement occupied the same position at the end of that struc ture. Each followed a list of the basic elements of an excusable delay. In each instruction, those elements defined whether a delay was “excusable” in the comm on sense of the term, i.e., whether it was beyond GIT’s control and not due to GIT’s fault or negligence, and whether GIT promptly notified MK, so that the d elay would not extend unnecessarily. 9 Each instruction proceeded to focus the jury on t he conceptually distinct question whether the delay was relevant, i .e., whether it affected GIT’s ability to timely complete the project as a whole. MK’s proposed instruction did so by specifying thata delay must “delay not just the particular activity at issue, but the over all completion date of the Work.” The court’s instruction did so by requiring the jury to find that MK had “refused-21-

to allow GIT the additional time necessary to compl ete the work.” To find a delay excusable under MK’s instruction, the jury ha d to find that it would delay “the overall completion date of the Work.” Under t he court’s instruction, the jury had to conclude that a delay made “additional time necessary to complete the work.” Each instruction thus required the jury to decide, first, whether GIT should be excused for a delay to a specific task an d, second, whether that specific delay should excuse GIT from meeting the project’s deadline. Unlike the instructions given, MK’s proposed instru ction spelled out at some length, in the same terms as federal-contracti ng case law, the requirement that a delay affect overall completion. But this c ourt’s concern is not whether a district court’s instructions are inferior to a pro posed instruction. Our concern is to ensure that our review does not leave us with “s ubstantial doubt whether the instructions, considered as a whole, properly guide d the jury in its deliberations.” Mason v. Oklahoma Turnpike Auth. , 115 F.3d 1442, 1454 (10th Cir. 1997). These instructions do create some doubt whether the jury was properly guided, but that doubt is not sufficiently substantial to constitute error. 3. Harmless-Error Review Even if a review of the instructions, read in isolation from the rest of the trial, did leave this court with a substantial doub t, it would then be necessary to determine whether any error prejudiced MK. See Lusby v. T.G. & Y. Stores, Inc. , 796 F.2d 1307, 1310 (10th Cir. 1986) (“Harmless err or analysis normally applies-22-

in civil cases . . . and it specifically applies to faulty jury instructions.”) (citing 28 U.S.C. § 2111; Fed. R. Civ. P. 61). See generally11 Charles Alan Wright et al., Federal Practice & Procedure § 2886 (2d ed. 1995). Instructional error requir es reversal “‘“only if the error is determined to have been prejudicial, based on a review of the record as a whole.”’” Shugart v. Central Rural Elec. Coop. , 110 F.3d 1501, 1508 (10th Cir. 1997) (quoting Wheeler v. John Deere Co. , 862 F.2d 1404, 1411 (10th Cir. 1988) (quoting Durflinger v. Artiles, 727 F.2d 888, 895 (10th Cir. 1984))). Unfortunately, the parties have offered no guidance to the over-3,000-page record of this complex, three-week trial. This cou rt thus has no idea which parts of the record might bear on prejudice, and no sensi ble way to review “the record as a whole.” That failure leaves us unable to dete rmine whether the error, if any, prejudiced MK. a. The standard for whether an instruction error was harmless MK cites Farrell v. Klein Tools, Inc. , for the proposition that, if instructions are erroneous, this court must reverse unless we can say with “absolute certainty” that the error did not influen ce the jury. 866 F.2d 1294, 1301 (10th Cir. 1989). MK apparently reads Farrellto relieve it of any obligation to explain how an error may have prejudiced its substantial rights, or to identify any parts of the record that might show such prejudice.10Farrelldoes require this court to assume that the jury inthis case relied

on an excusable-delay theory unless we can say “with absolute certainty” that it did not. 866 F.2d at 1301. That assumption, howev er, does not by itself compel reversal. Even assuming the verdict did rely on fi ndings of excusable delay, any error in defining such delays was harmless if the j ury would have found the same delays excusable, and reached the same verdict, und er correct instructions. -23- Farrell , however, is inapposite. It concerned not an inst ruction that misstated the law, but an instruction on a theory u nsupported by sufficient evidence. See id. at 1297–98. The improper theory was an affirmativ e defense, and the jury returned a general verdict for defenda nt. See id. at 1298. On appeal, this court noted the general rule in such cases: if one of several issues submitted to a jury should not have been, a general verdict c annot stand. See id. at 1299. After noting exceptions to the rule, we held that w e were “bound, at least in this context, by our two most recent [general-verdict] c ases, both of which strictly imposed the general rule.” Id. at 1299–1300 (following McMurray v. Deere &
Co. , 858 F.2d 1436, 1444 (10th Cir. 1988) (not applyin g harmless-error review in case involving general verdict and affirmative defe nse unwarranted by evidence); Smith v. FMC Corp. , 754 F.2d 875, 876–77 (10th Cir. 1985) (same)). W e held that those precedents “leave[] no room for harmless error analysis.” Id. at 1300. In this case, the court allegedly erred not by inst ructing on an unwarranted theory, but by misstating the law on a viable theory. Harmless-error analysis does apply in such cases. 10 When sufficient evidence supports each theory sub mitted to a jury, an error in stating the law that governs on e of the theories may be11 See City of Wichita , 72 F.3d at 1495; SEC v. Peters , 978 F.2d 1162, 1167

(10th Cir. 1992); Adams-Arapahoe Jt. Sch. Dist. No. 28–J v. Continental Ins. Co. , 891 F.2d 772, 780 (10th Cir. 1989) (quoting Farrell , 866 F.2d at 1301). -24- harmless. See, e.g. , Allen , 97 F.3d at 1372–73; Mehojah v. Drummond, 56 F.3d 1213, 1215–16 (10th Cir. 1995). MK also quotes an opinion saying that this court “‘ must reverse if the jury might have based its verdict on the erroneously giv en instruction.’” Coleman v. BG Maint. Mgmt. of Colo., Inc. , 108 F.3d 1199, 1202 (10th Cir. 1997) (quoting City of Wichita, Kan. v. United States Gypsum Co. , 72 F.3d 1491, 1495 (10th Cir. 1996)). Three prior opinions also state that rule; 11 two specify that we must

reverse “[e]ven if that possibility is ‘very unlikely.’” City of Wichita , 72 F.3d at 1495 (quoting Adams-Arapahoe Jt. Sch. Dist. No. 28–J v. Continental Ins. Co. , 891 F.2d 772, 780 (10th Cir. 1989) (quoting Farrell , 866 F.2d at 1301)). An earlier opinion, however, sets a much less strict s tandard, requiring affirmance unless it is fifty percent likely that an error was prejudicial. See U.S. Indus., Inc. v. Touche Ross & Co. , 854 F.2d 1223, 1253 n.39 (10th Cir. 1988) [ USI ] (in instruction-error case, noting circuit split on “st andard of review . . . in gauging the effect of an error in a civil case” and adoptin g rule that error is harmless if appellant’s “substantial rights . . . were more pro bably than not unaffected”).12 See Coleman , 108 F.3d at 1204–05; City of Wichita , 72 F.3d at 1495–96;

Peters , 978 F.2d at 1167–68; Adams-Arapahoe , 891 F.2d at 778–80.

13 No opinion in the Adams-Arapahoe line holds that, even if the parties offer no record or arguments regarding prejudice, this court will presume it. See Coleman , 108 F.3d at 1204–05; Peters , 978 F.2d at 1167–68; Adams-Arapahoe , 891 F.2d at 778. In City of Wichita , we did say that “[p]rejudice must be presumed in this case because we cannot ascertain t o what extent” the instructions had kept appellant from proving its case. 72 F.3d at 1495. The panel did not specify, however, whether it was unable to ascertai n prejudice because the arguments and record were indeterminate, or because the parties failed to provide any. This court will not assume that the case invo lved a failure to provide or cite a record, and thus created, sub silentio , a new rule that we must presume prejudice in cases lacking any record or argument o n the issue. -25- This case does not require this court to reconcile those precedents. None says that harmless-error analysis does not apply. 12 They conflict on a substantive question: how likely must it be that an instructio nal error was prejudicial for this court to reverse? They do not concern the procedur al question posed by this case: can this court determine the chance that an error w as prejudicial if the parties provide no relevant appendix or arguments? Even as suming that a “very unlikely” chance compels reversal, our precedent se tting that standard did not obviate the rules of appellate procedure. 13 Without a sufficient appendix, or any arguments citing the record, this court cannot dete rmine whether the chance that an error prejudiced MK is fat, slim, or nil. b. The parties’ obligations to provide an appendix and arguments As appellant, MK was bound to “file an appendix [of record excerpts] sufficient for consideration and determination of t he issues on appeal.” 10th Cir.14 After the parties had briefed this appeal, this cou rt amended its rules,

effective January 1, 1999. Rule 30.1.1 is now slig htly reworded and renumbered as Rule 30.1(A)(1).

15 MK did ask the reporter to produce a complete trial transcript, which now resides in the district court as part of the “recor d on appeal.” See 10th Cir. R. 30.1. Appellants, however, must provide materials “sufficient for consideration and determination of the issues on appeal” not onlyin the record on appeal, but in the appendix filed with this court. 10th Cir. R. 3 0.1.1 (“[I]nclusionary . . . requirements applicable to a record on appeal are e qually applicable to appellant’s appendix.” (cross-referencing 10th Cir. R. 10.3 (no ting “counsel’s responsibility to see that the record on appeal is sufficient”))); see United States v. Dean , No. 93–3114, 1994 WL 43349, at *1 (10th Cir. Feb. 14, 1 994) (declining to review issue because, while “[appellant] ordered the trans cript, and the trial transcript was filed in the district court, [appellant] failed to include the entire trial transcript in his appendix to this court.”). Rule 30.1.1 made clear that MK was responsible for filing a sufficient appendix, and t hat this court was “under no obligation to remedy any failure.” -26- R. 30.1.1 14 ; see also 10th Cir. R. 10.1.1; Fed.R.App.P. 10(b)(1) & 30(a) . MK’s appendix contains a few hundred pages of trial exce rpts, but less than 10% of the entire 3,123-page transcript. 15 GIT’s supplemental appendix adds a few hundred

more. This court has held “on a number of occasions and i n a variety of settings that the lack of a required transcript leaves us wi th no alternative but to affirm.” McGinnis v. Gustafson , 978 F.2d 1199, 1201 (10th Cir. 1992). An appellant’s failure to provide a necessary transcript entails m ore than mere “noncompliance with some useful but nonessential procedural admoni tion”; it “raises an effective barrier to informed, substantive appellate review.” Id. Such failures have kept this court from reviewing alleged instruction error s. See Dikeman v. National16 Judge Lucero wrote separately to disavow reliance o n the latter ground,

expressing concern that it suggested “that an appel lant invariably carries a burden to disprove harmlessness” and thus “needlessly ente r[ed] the much conflicted body of jurisprudence regarding burdens or presumpt ions in harmless error analysis in civil cases.” Allen , 97 F.3d at 1374 (Lucero, J., concurring). This court discusses below our view that we may affirm b ased on the lack of record or arguments about prejudice without entering that con flict. See infraat 29–35. -27- Educators, Inc. , 81 F.3d 949, 955 (10th Cir. 1996); King v. Unocal Corp. , 58 F.3d 586, 587–88 (10th Cir. 1995). Kingbegan its analysis by stressing this court’s duty to “‘“consider all the jury heard.”’” 58 F.3d at 587 (quoting Considine v. Newspaper Agency Corp. , 43 F.3d 1349, 1365 (10th Cir. 1994) (quoting Resolution Trust Corp. v. Stone , 998 F.2d 1534, 1549 (1993))). As a result, this court explained, “we must have a proper record befo re us” in order to review an alleged error in admitting or excluding a jury inst ruction. Id. InAllen , this court held in the alternative that an instruction had notbeen prejudicial, and that appellant’s failure to provide a trial transcript l eft no option but to affirm: Although plaintiff speculates the verdict would hav e been different had the [challenged instruction] been different, we have no basis for reaching that conclusion without first reviewing th e evidence that was admitted at trial. On the record presented, w e are unable to conclude that plaintiff was prejudiced by the [assu med error in the instruction]. 97 F.3d at 1372–73 (citing 10th Cir. R. 10.1.1). 16 Precedent would thus justify affirmance based on MK ’s failure to provide a sufficient appendix. Even if this court ignored th at failure and sua sponte obtained the 3,123-page transcript, we would then c onfront the parties’ shared17 GIT argues that any error in defining “excusable de lay” was irrelevant, as

it was not behind schedule at all. But GIT does no t discuss or cite the record regarding the relevant question: assuming the jury did rely on findings of excusable delay, did any error in defining such del ay prejudice MK? -28- failure to make arguments citing that transcript oreven providing general guidance as to which parts of it might bear on the issue of prejudice. Each party on appeal must make arguments including “contention s and the reasons for them, with citations to the . . . parts of the record on which [it] relies.” Fed. R. App. P. 28(a)(9) & (b). In this case, neither party has ma de any argument that might guide this court in reviewing the voluminous transc ript, were we inclined to remedy MK’s failure to provide it. 17 Without citing the record, MK deems it “impossible to determine if the jury would have treated GIT’s claims differently had the criticality requirement been imposed.” Harmless-error analysis, however, requir es this court to address not the unanswerable question whether the jury would have treated GIT’s claims differently, but the eminently answerable question whether the jury might have treated GIT’s claims differently. MK’s failure to address that question is complete: it never argues that GIT’s “excusable del ays” did not in fact cause overall delay. Nor does it assert that it ever did so at trial, i.e., that it ever argued one of GIT’s claimed delays was not “excusable” bec ause the delay had not affected overall completion. It does claim that “i ssue[s] of delay and timely completion” were central to the trial, and argues t hat caselaw required GIT to-29-

show each individual delay caused an overall delay. But it never asserts a link between that legal argument and the outcome in this case: it says nothing inconsistent with an assumption that each delay cla imed by GIT did in fact contribute to overall delay, and that any error in omitting the issue from the instructions was purely technical. MK thus has not made a basic “contention” essential to any conclusion that the error prejudiced its substantial rights. Fed. R. App. P. 28(a)(9). Even were this court to infer from MK’s brief a bare contenti on that some of GIT’s claimed delays did not cause overall delay, the brief would still lack “reasons” for that implicit contention and “citations to the . . . parts of the record on which [it] relies.” Id. MK’s failure to provide a sufficient appendix, a nd both parties’ failure to make arguments citing the record, leave this court only two alternatives: to speculate baselessly about prejudice, or to affi rm. c. It is unnecessary to decide whether either party bears a burden of persuasion regarding prejudice In rejecting the path of speculation, this court ne ed not enter the bog surrounding the issue whether appellants in civil c ases bear a burden of persuasion on the issue of prejudice. See Allen , 97 F.3d at 1374–75 (Lucero, J., concurring). We do observe that an appellant must provide a sufficient record on appeal, and that both parties must make arguments w hich enable us to meaningfully review the record. To note those duti es, however, is not to say that,18Nor is it to suggest that an appellant’s duty to make arguments citing the

record is unilateral. An appellee shares that duty

. See Fed. R. App. P. 28(b). An appellee has no parallel duty to produce an appendi x, but it may supplement the appellant’s. See 10th Cir. R. 30.2. -30- if the parties fulfill them, this court will then a llocate to one party or the other an appellate burden of persuasion. 18 This appeal turns not on any such rule, but on the answer to a simple, narrow question: if this co urt is unable, for whatever reasons, to determine whether an error was prejudic ial or harmless, which party must lose? In ordinary civil cases, we conclude, that party is the appellant. To explain that holding’s narrow compass, we must addr ess the Supreme Court’s recent discussion of burdens of persuasion in harml ess-error review.
In habeas cases, the Court held, an appellate court must dec ide whether errors were harmless or prejudicial “‘without benef it of such aids as presumptions or allocated burdens of proof that expedite fact-fi nding at the trial.’” O’Neal v. McAninch , 513 U.S. 432, 436–37 (1995) (quoting Roger J. Traynor, The Riddle of Harmless Error26 (1970)). Part of O’Neal ’s holding depends on concerns unique to habeas cases, but its rejection of the use of burdens in harmless-error review apparently does not. See id. at 442 ( “[E]ven if . . . we were to assume that the civil standard for judging harmlessness applies to habeas proceedings . . . it would make no difference.”). This court has not addressed whether O’Nealreversed our longstanding rule that appellants in ordinary civil cases bear the bu rden of showing that any errors19 The original statute, 28 U.S.C. § 391, is “recodifi ed with minor changes”

by the current harmless-error statute, and is the “ statutory source” of the civil harmless-error rule. See O’Neal, 513 U.S. at 441 (citing 28 U.S.C. § 2111 and Fed. R. Civ. P. 61).

20 See K-B Trucking Co. v. Riss Int’l Corp. , 763 F.2d 1148, 1155–56 (10th Cir. 1985); Neu v. Grant , 548 F.2d 281, 286–87 (10th Cir. 1977); Bonner v. Polacari , 350 F.2d 493, 496 (10th Cir. 1965); Vincent v. Young , 324 F.2d 266, 269 (10th Cir. 1963); Atlantic & Pac. Ins. Co. v. Combined Ins. Co. of Am

. , 312 F.2d 513, 515–16 (10th Cir. 1962); Ahern v. Webb , 268 F.2d 45, 46 (10th Cir. 1959); Creekmore v. Crossno , 259 F.2d 697, 698 (10th Cir. 1958).

21 Appellant had not objected to an instruction, whichthe panel thus reviewed only for plain error. See Lusby , 796 F.2d at 1311–12. The quoted dictum was in a footnote comparing burdens of persuasion in plain-error and harmless-error analyses. See id. at 1312 n.4. -31- prejudiced their substantial rights. See, e.g. , K-B Trucking Co. v. Riss Int’l Corp. , 763 F.2d 1148, 1156 (10th Cir. 1985); Scritchfield v. Kennedy , 103 F.2d 467, 474 (10th Cir. 1939). Nor does this case require that we do so. In Scritchfield, a 1939 instructional-error case, this court held that the original harmless-error statute imposed on appellants the burden of showing prejudi ce. See 103 F.2d at 474. 19 Four years later, the Supreme Court stated the same rule: “[the party] who seeks to have a judgment set aside because of an erroneou s ruling carries the burden of showing that prejudice resulted.” Palmer v. Hoffman , 318 U.S. 109, 116 (1943). In seven opinions between 1958 and 1985, this courtreiterated the rule of Scritchfield

and Palmer

. 20 In 1986, however, a panel said, in dictum , 21 that “[i]n harmless error analysis the beneficiary of the error (usually the appellee) has the burden to show-32-

that the error almost surely did not affect the out come.” Lusby , 796 F.2d at 1312 n.4. The panel cited no authority for this proposi tion, which contradicted circuit and Supreme Court precedent. Its dictum would have been benign, though, had a 1992 panel not converted it to a holding. See Board of County Comm’rs of San Juan County v. Liberty Group , 965 F.2d 879, 884 (10th Cir. 1992) [ San Juan ] (applying rule that beneficiary of instruction erro r “has the burden of showing that the error ‘almost surely did not affect the ou tcome’”) (quoting id. )). San
Juan relied solely on Lusby ; it did not cite any valid authority or address th e contrary precedent of this circuit and the Supreme Court. This court has not applied the rule since. It is well-settled that “‘when faced with an intr a-circuit conflict, a panel should follow earlier, settled precedent over a sub sequent deviation therefrom.’” Clymore v. United States , 164 F.3d 569, 573 n.5 (10th Cir. 1999) (quoting Haynes v. Williams , 88 F.3d 898, 900 n.4 (10th Cir. 1996)). Lusby ’s and San Juan ’s

comments assigning appellees the burden of establishing harm lessness are thus not good law. They had not, as of 1992, displaced the rule of Scritchfield

. This court need not answer the distinct question wh ether the 1995 O’Neal opinion did overrule Scritchfield, and thus relieve appellants of the burden of proving prejudice. Even assuming that O’Nealgoverns, we must affirm. O’Neal eliminates the use of a “burden of proof” to review prejudice, but it does not-33-

eliminate an appellant’s duty to provide an appendi x, or the parties’ shared duty to make arguments citing the record. In rejecting the use of burdens or presumptions, th e O’NealCourt stressed the need for thorough, conscientious record review, and suggested that invoking a “burden of proof” may short-cut that review . See id. at 435–37. It emphasized that cases of “virtual equipoise,” in which a courtmay properly resort to a default rule, are rare. Id. at 435. It also quoted Justice Traynor’s rejectio n of decisionmaking “aids”: “Whether or not counsel are helpful, it is still th e responsibility of the . . . court, once it concludes there was error, to determine whether the error affected the judgment. It must do so wit hout benefit of such aids as presumptions or allocated burdens of p roof that expedite fact-finding at the trial.”
Id. at 437 (quoting Traynor, supra , at 26). O’Neal requires courts to review the record and reach a decision on prejudice whenever p ossible, instead of simply identifying some appeals as “close cases” and invok ing a “burden of proof” to resolve them. O’Nealthus makes it even more crucial that appellants pr ovide sufficient appendices, and both parties make arguments support ed by sufficient citations to enable meaningful review. This court has repeatedl y declined to “sift through” entire records to find support for arguments devoidof citations. See, e.g. , United States v. Rodriguez-Aguirre , 108 F.3d 1228, 1237–38 n.8 (10th Cir. 1997); Harold’s Stores, Inc. v. Dillard Dep’t Stores, Inc. , 82 F.3d 1533, 1540 n.3 (10th22 In the passage quoted in O’Neal, Justice Traynor did refer to a court’s

responsibility to determine prejudice “whether or n ot counsel are helpful.” See Traynor, supra , at 26 (quoted at 513 U.S. at 437). O’Neal , however, did not involve a lack of record or arguments on the issue of prejudice, and the Court’s point in quoting Justice Traynor was not to address such a case. -34- Cir. 1996). By eschewing the shortcut of a “burdenof proof,” O’Nealonly increases this court’s need for sufficient guidance from parties to enable us to review voluminous records intelligently, rather than sift through them aimlessly. 22 If the appendices and arguments leave this court un able to determine whether an error was prejudicial, we must resolve the appeal by invoking a default rule imposing the risk of equipoise on one party. To do so is not to impose a “burden of proof” on that party, and is fu lly consistent with O’Neal

. That opinion governs cases in which a court truly c annot decide if an error was harmless and must resort to a default rule. See id. at 435, 437. While the Court intended to narrow that class of cases by rejecting the use of “burdens of proof,” it recognized that such cases will still arise. Wh en they arise in the habeas context, O’Nealholds, the error must be deemed prejudicial. Id. at 436. While eliminating any “burden of proof,” O’Nealthus did not shrink from “placing the risk of doubt” on one party. Id. at 439. To do so was not optional. If a court must resolve each appeal, and cannot do so by flipping coins, then it must place the “ri sk of doubt” on one party or the other. That risk becomes relevant if the court can not ascertain whether an error was harmless. It may be unable to do so because, a s envisioned in O’Neal , the-35-

parties provide an adequate record and arguments, b ut the court’s review leaves it in “virtual equipoise.” Or the court may be unable to do so because, as here, the parties’ failure to provide such material prevents it from commencing any review. O’Nealassigned the risk of doubt in habeas appeals to the State, noting the writ’s purpose and the uniquely uneven stakes in th ose nominally civil cases. See id. at 442–43. If O’Nealapplies to non- habeas cases, this court concludes, the risk of doubt must rest with the appellant. That r ule accords with the appellant’s responsibility for the appendix, and its status as the party seeking to change the status quo. More importantly, it preserves that part of our longstanding Scritchfield

rule which is not inconsistent with O’Neal . The O’NealCourt rejected the use of decisionmaking shortcuts like aburden of proof, but acknowledged the need to place the risk of doubt onone party. Our Scritchfield rule, meanwhile, has two components: it uses a burd en of proof, and it puts the risk of doubt on appellants

. Only the first is inconsistent withO’Neal

. Accordingly, even if the instructions were erroneou s, MK’s failure to provide a sufficient appendix, and the parties’ fai lure to make arguments affording any guidance to the voluminous record, wo uld require us to affirm. C. Damages MK challenges the sufficiency of the evidence of GI T’s claimed damages in general, and of three specific categories of damage s: attorney’s fees, equitable adjustments, and claims on behalf of subs. It also argues that the contract barred-36-

GIT as a matter of law from asserting the latter cl aims without having first settled with and paid its subs.
1. Sufficiency of GIT’s Evidence of Damages MK makes two overlapping challenges to GIT’s damage evidence. The first is that GIT ignored the contract provision de tailing the damages to which it was entitled, and that the court allowed it instead to submit evidence supporting “a common-law measure of damages.” The second is that GIT did not offer sufficient evidence of a “causal connection” betwee n MK’s acts and the majority of the damages GIT claimed in the exhibits submitte d to the jury. As noted above, the contract required the court to determine all substantive legal issues in accord with the body of government- procurement law. In addition, GP 55H, part of the contract’s termination-for-conv enience clause, provides that “[t]he cost principles and procedures of FAR, Part 31 . . . shall govern all costs claimed, agreed to, or determined under this articl e.” Under those principles, as interpreted in the decisions of the federal courts and boards of contract appeals which handle most federal-contracting disputes, GIT bore the burden of proving damages in accord with the contract “‘with sufficie nt certainty so that the determination of the amount of damages will be more than mere speculation.’” Lisbon Contractors, Inc. v. United States , 828 F.2d 759, 767 (Fed. Cir. 1987) (quoting Willems Indus. v. United States , 295 F.2d 822, 831 (Ct. Cl. 1961)). MK was not obliged to present evidence attacking items of damages if GIT had not23 The $1.9 million total includes roughly $615,000 fo r “GIT-owned

equipment directed [to be] left on-site and [later] used by MK[].” GIT also claimed roughly $275,000 for “GIT Equipment Standby : Off-Site.” The parties do not discuss, and the record on appeal does not r eveal, whether the latter claim was part of GIT’s equitable adjustments or its clai ms for post-termination equipment-related expenses, to which MK has not str enuously objected. Because this court must order a new trial, we need not reso lve that uncertainty.

24 This amount includes profit, overhead, and bond. If on remand GIT substantiates its claim for attorney’s fees, MK rem ains free to contest the propriety of awarding GIT profit, or overhead at a rate presumably applicable to construction activities, on that claim.

25 This court’s conclusion that the contract barred GI T from asserting its (continued...) -37- made a prima facie showing that the items were properly included in i ts claim. See id. In addition, FAR part 31 required GIT to prove thatincurred costs were “reasonable.” See 48 C.F.R. §§ 31.105(a)–(b), .201–3, .204(a). For purposes of analysis, it is appropriate to divi de GIT’s total claim of roughly $11.35 million into equitable adjustments ( $3 million), lower-tier subcontractor claims ($3.7 million), attorney’s fee s ($1.35 million), unpaid contract work and post-termination equipment expens es and work ($1.9 million), 23 and other ($1.4 million). (All figures include ove rhead, profit, and bond.) As detailed below, GIT offered no admissible evidence whatsoever to support its claim of roughly $1.35 million for attorney’s fees. 24 GIT also did not offer sufficient evidence to support its claims for rough ly $3 million in equitable adjustments to the contract. Nor did it offer suff icient evidence of most if not all of the roughly $3.7 million in damages it claimed o n behalf of its subs. 2525 (...continued)

subs’ claims without having first settled those cla ims makes it unnecessary to address MK’s argument that the evidence supporting the claims was insufficient. MK does not specifically challenge the sufficiency of the evidence supporting GIT’s claimed damages, totaling roughly $1.9 millio n, for work performed under the contract for which MK withheld payment; for work MK required it to perform after the termination; and for equipment MK require d it to leave on site after the termination. GIT’s insufficient evidence of its cl aimed attorney’s fees and equitable adjustments, and the impropriety as a matter of law of its unsettled subcontractor claims, jointly require a new trial. This court thus need not determine whether GIT offered sufficient evidence o f its other claimed damages.

26 There is one major difference between common-law damages for breach of contract and termination-for-convenience damages in federal contracting law. Common-law damages may include anticipated profits on work that a contractor was to perform under the terminated part of a contr act. Convenience-termination damages under federal-contracting law may not. See, e.g. , Rhen v. United States , 17 Cl. Ct. 140, 143 (1989); William Green Constr. Co. v. United States , 477 F.2d 930, 936 (Ct. Cl. 1973). See generallyCibinic & Nash, supra, at 692–93. -38- a. GIT’s evidence was not based only on a common-lawdamages theory MK’s broader argument is that GIT premised all of i ts damage evidence on a common-law theory of damages fundamentally incons istent with the contract and the FAR. MK acknowledges that the district cou rt rejected GIT’s commonlaw theory and properly instructed the jury to awar d damages in accord with the contract. MK argues, however, that the court nonet heless admitted evidence inconsistent with the contract and did not require evidence consistent with it. MK is incorrect. GIT did seek a common-law measure of damages rather than the damages provided by the contract. 26 It did so, however, as part of its claim that the termination had been not merely wrongful but in bad faith. If GIT had proved bad faith, it could have recovered full common-law damages for breach of27 The exception is GIT’s claim of roughly $7,000 for “weather delay

damages.” (Robinson’s pass-through claim also apparently included such damages.) The contract plainly forbids any award o f costs, as opposed to extensions of time, for delays caused by weather. The issue, however, is not as straightforward as itmight seem. The record on appeal suggests that GIT did not simply argue th at weather had delayed its work, and MK should pay for its resultant costs. R ather, GIT argued that MK had been unduly cautious, or relied on defective sensin g equipment, in requiring GIT to stop work on numerous occasions because of lightning. GIT apparently sought compensation for costs due to such stoppages. The parties have not briefed or provided a complete record on this issue. This cou rt thus leaves for remand the question whether GIT may recover damages caused by MK’s inaccurate measurement of, or unreasonable response to, severe weather. -39- contract. See Apex Int’l Mgmt. Servs., Inc. , ASBCA No. 38087, 94–2 B.C.A. (CCH) ¶ 26,842, at 133,550, 1994 WL 117148 (1994); see also Section of Public Contract Law, American Bar Association, Government Contract Law: The Deskbook for Procurement Professionals 325 (1995) [hereinafter Gov’t Contract Deskbook]. The court, however, declined to submit the bad- faith claim to the jury. It ultimately required GIT to delete anticip ated profits from its claim, and it instructed the jury on damages recoverable under th e termination-for-convenience clause. MK identifies several other allegedly impr oper damage items, but, with one minor, arguable exception, 27no actually improper item went to the jury. b. GIT did not present sufficient evidence of the ca usation and reasonableness of at least two of its categories of claimed damages MK frames its second sufficiency-of-the-evidence ar gument in terms of the common-law requirement of “causation for breach of contract damages.” Under the contract, however, and the federal contracting law that it incorporates, GIT28 The parties do not seem to dispute GIT’s right to d amages for work that

the contract required, and that GIT performed, but for which MK did not pay.

29 The contract contained the standard federal Changes clause for fixed-price construction contracts. See 48 C.F.R. (FAR) § 52.243–4. The clause provides that MK may, “by written order designated . . . a c hange order, make changes in (continued...) -40- did not have to prove an entitlement to common-law breach-of-contract damages. It had to prove an entitlement to equitable adjustm ents to the contract price. 28 See generallyCibinic & Nash, supra, at 430, 671, 692 (explaining primacy of equitable-adjustment analysis (citing, e.g., Johnson & Son Erectors , ASBCA No. 24564, 81–1 B.C.A. (CCH) ¶ 15,082, at 74,599, 1981 WL 7060 (1981), aff’d, 231 Ct. Cl. 753, 1982 WL 1441 (1982))). An equitable adjustment is a change in contract pri ce. It compensates a contractor for increased costs reasonably incurred because the government (or, in this case, MK) increased the amount or difficulty o f work required by the contract, or delayed or accelerated that work. See id. at 669–73 (citing, e.g., Modern Foods, Inc. , ASBCA No. 2090, 57–1 B.C.A. (CCH) ¶ 1229, at 3544 , 1957 WL 4960 (1957); Celesco Indus., Inc. , ASBCA No. 22251, 79–1 B.C.A. (CCH) ¶ 13,604, at 66,683, 1978 WL 2148 (1978) (describing equitable adjustment as “the difference between the reasonable cost of performin g without the change . . . and the reasonable cost of performing with the change”) ). Some equitable adjustments are for work added by formal change ord ers. The contract included a standard clause allowing such orders. 29 Other equitable adjustments result from29 (...continued)

the work within the general scope of the Subcontrac t”; that “[a]ny other written or oral order . . . from [MK] that causes a change sha ll be treated as a change order” upon written notice by GIT; and that “[i]f any chan ge under this article causes an increase or decrease in [GIT]’s cost of . . . perfo rmance . . . [MK] shall make an equitable adjustment and modify the Subcontract in writing.” -41- “constructive changes,” which occur when the govern ment does something to increase a contractor’s costs without issuing a formal change order. See id. at 381, 399, 408–09, 429–35; see also 48 C.F.R. § 52.243–4(b), (d). If a contractor thinks that the government has caus ed a constructive change, it must ask the government to equitably adjust the contract. The contractor must show either its estimated costs, if it requests the adjustment before doing the additional work, or its incurred costs, if it reque sts the adjustment after having completed the work. See Cibinic & Nash, supra , at 669–71. The contractor may convince the officer administering the contract to adjust the contract during performance. If not, it must convince an adjudicat or to award an adjustment after the contract is completed or terminated. See id

. To prove that it is entitled to an equitable adjust ment, a contractor must show liability, causation, and injury. See Wunderlich Contracting Co. v. United
States , 351 F.2d 956, 968 (Ct. Cl. 1965). It must prove that the government somehow delayed, accelerated, augmented, or complic ated the work, and thereby caused the contractor to incur specific additional costs. See id. at 969. See generally Cibinic & Nash, supra, at 429–35, 697–702. The contractor must not30 Until recently, the courts and boards of contract appeals that adjudicate

most federal-contract disputes applied a presumptio n that a contractor’s incurred costs were reasonable. The government bore the bur den of proving that incurred costs were unreasonable. See, e.g. , Neal & Co. v. United States , 19 Cl.Ct. 463, 470 (1990) (citing Bruce Constr. Corp. v. United States , 324 F.2d 516 (1963)). See generallyWorthington & Goldsman, supra , § 7–4, at 147–48. In 1987, though, the FAR was amended to state that “[n]o pre sumption of reasonableness shall be attached to the incurrence of costs by a c ontractor.” 48 C.F.R. (FAR) § 31.201–3, as amended by 52 Fed.Reg. 19,804 (1987) ; see, e.g. , Herman B. Taylor Constr. Co. v. General Servs. Admin. , GSBCA No. 12915, 96–2 B.C.A. (CCH) ¶ 28,547, at 142,529–30, 1996 WL 498543 (1996 ) (“With the revision of FAR 31.201-3 . . . the burden of proof to establishthe reasonableness of the incurred cost is placed on the contractor.”); Worth ington & Goldsman, supra , §7- 4, at 148. GP 55H of the MK-GIT contract incorporates FAR § 31.201–3.

31 MK also argues that GIT improperly based its damage calculation entirely on budget overruns, i.e., costs incurred in excess of GIT’s internal budget. GIT unilaterally created that budget after the contractaward. MK argues that GIT’s (continued...) -42- only prove that the government specifically caused its increased costs, but must prove that those costs were reasonable, allowable, and allocable to the contract. See, e.g. , McDonnell Douglas Corp. v. United States , 40 Fed.Cl. 529, 536 (1998) (citing 48 C.F.R. (FAR) §§ 31.201–1 to 201–4 (requi ring and defining allowability, reasonableness, and allocability)). See generallyCibinic & Nash,

supra , at 697–702. The contractor bears the burden of p roof on all of those factors. See McDonnell Douglas , 40 Fed.Cl. at 536; see also Lisbon Contractors , 828 F.2d at 767. 30 GIT presented very little or no evidence of how MK’ s actions specifically caused GIT to incur the costs claimed in its damage exhibits. Nor did it present evidence that those costs were reasonable. 3131 (...continued)

reliance on such overruns made its entire damage cl aim improper as a matter of law. But MK has not rebutted GIT’s assertions thatit based only a few of its equitable-adjustment claims on costs in excess of i ts internal budget. MK cites only dictum from one board-of-contract-appeals opinion to supp ort its assertion that use of such budget figures makes a damage clai m invalid as a matter of law. See Bruce-Andersen Co. , ASBCA No. 31663, 89–3 B.C.A. (CCH) ¶ 22,013, at 110,729–30, 1989 WL 74316 (1989) (criticizing contr actor’s use of “after-the-fact budget figure” exceeding figure from bid, after not ing that appeal only concerned entitlement to adjustment, not amount thereof). -43- i. Attorney’s fees The court erred in submitting GIT’s $1.35 million c laim for outside attorneys’ and consultants’ fees (“attorney’s fees” ) to the jury. GIT presented no admissible evidence whatsoever of such fees. The c ourt apparently made a simple error of omission at the end of this long, complex trial. During the trial, as detailed below, the court properly ordered GIT to r emove the claim for attorney’s fees from its damage exhibit. Despite MK’s prompti ng, however, the court ultimately failed to require GIT to do so. On appe al, MK has demonstrated GIT’s complete failure to document its attorney’s fees. GIT has not meaningfully contested that failure. GIT’s final damage exhibit claimed roughly $1.55 mi llion for “equitable adjustment costs to date.” Kip Cooper, GIT’s damag e witness, testified that roughly $450,000 thereof was for time spent by GIT employees to prepare GIT’s claim. The rest was for the fees of “outside consu ltants and attorneys.” With overhead, profit, and bond, that amount totaled rou ghly $1.35 million.-44-

MK objected that GIT had introduced no evidence of the fees, i.e., invoices from the outside attorneys. Both Cooper and GIT’s counsel promptly conceded that the invoices were not in evidence. The court declined to let Cooper testify as to the amount incurred, observing that attorney’s f ees “have to be proved like any other item of damage. It requires some more proof than this man saying that’s what was paid.” The court further noted that if, i ndeed, none of GIT’s evidence substantiated its claimed fees, then the fees “will be deleted from that exhibit and from your claim. . . . I’m not going to let you cla im specific expenditures that were not supported in the documents.” GIT acceptedthis ruling without protest. Soon thereafter, GIT tried to introduce the invoice s into evidence. The court asked why GIT had not provided them until mid -trial. “We had to go out there and just collect them up,” GIT’s counsel repl ied. The court ruled that “[i]f it hasn’t been disclosed until the middle of trial, it can’t be used. I don’t hear anything from you that would justify [GIT’s] late a ction.” GIT accepted this ruling without protest. GIT later eliminated its claims for anticipated pro fits and prejudgment interest from its damage exhibit, pursuant to the c ourt’s rulings on those issues. But GIT did not reduce its claim for “equitable adj ustment costs” to eliminate the disallowed attorney’s fees. During the jury-instruction conference the next day , MK moved to exclude the fee claim. MK noted that the court had not adm itted any evidence of the fees.32 The entire exchange was as follows:

MK: The damage claim has a component named in it fo r attorney’s fees. No evidence of attorneys’ fees was allowed to come in yesterday. COURT: Well, this was discussed this morning with r espect to instructions and I knew I had excluded something. I didn’t knowif it was everything or not. Is it, Mr. Schooley [GIT’s counsel]? GIT: I think it was just the outside claim preparat ion costs for attorneys. The internal costs of GIT with regard to claim prep aration costs were not excluded. COURT: And they are in these boxes of damage docume nts? GIT: The internal costs were in the boxes of the da mages, Your Honor. MK: Well, and my motion goes beyond that, however. We will present evidence . . . that attorneys’ fees are part of the overhead that was assigned to each claim. There was an overhead component assigned to each one of these claims and my underst anding is that attorneys’ fees are a part of that overhead too. COURT: Well, I’m not going to exclude the claim forattorneys’ fees. It’s up to you to establish if there’s some double recovery sought but just the claim for attorneys’ fees is supported app arently in admitted documents and that motion is overruled. -45- The court recalled having “excluded something” and asked GIT what it was. This provoked a confused exchange. 32 GIT’s counsel forthrightly acknowledged that it was “the outside claim preparation costs for attorn eys” that the court had excluded. MK, however, then made an additional arg ument, which apparently distracted the court. The court then misspoke, say ing, “I’m not going to exclude the claim for attorneys’ fees. . . . [J]ust the cla im for attorneys’ fees is supported apparently in admitted documents . . . .”33 GIT argues that MK failed to question the fees’ rea sonableness when they

were first mentioned, failed to present evidence ch allenging their reasonableness, and “never attempted to demonstrate what [MK] belie ved constituted a reasonable fee.” These starkly inadequate arguments all ignor e the fundamental point that it was GIT’s burden to prove the amount and reasonable ness of its fees, and that MK objected consistently, successfully, and withoutprotest to GIT’s failure to timely introduce any evidence to document those fee s. See, e.g. , Sheets v. Salt Lake County , 45 F.3d 1383, 1391 (10th Cir. 1995) (assigning to party claiming attorney’s fees the burden of documenting their ext ent and reasonableness “with meticulous and contemporaneous time records” (citin g Mares v. Credit Bureau of Raton , 801 F.2d 1197, 1210 (10th Cir. 1986))). -46- MK next moved for judgment as a matter of law (JMOL ) under Rule 50(a). The motion reminded the court of its refusal to adm it the invoices into evidence and asked it to instruct the jury that there was in sufficient evidence to support an award of fees. The court orally denied the motion without analysis or comment. MK has summarized the parts of the record revealing the court’s failure to enforce its order to exclude the attorney’s-fee cla im. GIT neverobjected to that order. In reply, GIT has not pointed to any contra dictory passage in the record. 33 GIT’s main argument on appeal is that MK waived the issue by failing to raise it in a post-verdict Rule 50(b) motion for JM OL, despite having raised it in a pre-verdict Rule 50(a) motion. GIT is wrong. MK’s failure to renew the attorney’s-fees issue in its Rule 50(b) motion does preclude this court on appeal from ordering the entry of judgment in MK’s favor o n that issue . See Cone v. West Va. Pulp & Paper Co. , 330 U.S. 212, 217–18 (1947); Fortier v. Dona Anna Plaza Partners , 747 F.2d 1324, 1334 (10th Cir. 1984); Hansen v. Vidal , 237 F.2d 453, 454 (10th Cir. 1956)

. Under Tenth Circuit precedent, however, that failur e34 As GIT notes, the Second Circuit takes a contrary v iew. That Circuit

holds that a party waives its right to appeal the s ufficiency of evidence, absent “manifest injustice,” if it challenges that suffici ency in a pre-verdict Rule 50(a) motion but fails to renew the challenge in a post-v erdict Rule 50(b) motion. See Norton v. Sam’s Club , 145 F.3d 114, 118 & n.2 (2d Cir. 1998) (discussin g Varda, Inc. v. Insurance Co. of N. Am. , 45 F.3d 634, 638 (2d Cir. 1995)). This panel need not consider the merits of that approach, as i t is without power to overrule the unequivocally contrary precedent of this Circui t. -47- does not bar MK from appealing the issue of the suf ficiency of the evidence to support the attorney’s-fees claim. See Marshall v. El Paso Natural Gas Co. , 874 F.2d 1373, 1385 (10th Cir. 1989); see also Orman v. Standard Constr. & Remodeling Co. , No. 92–6323, 1993 WL 262599, at *1 & n.1 (10th Ci r. July 8, 1993) (unpublished disposition) (specifying that fa ilure to move for JMOL under Rule 50(a) precludes review of sufficiency of evide nce, but that only effect of failure to renew motion under Rule 50(b) is to limi t relief to new trial). 34
ii. Equitable adjustments This court further concludes that GIT did not prese nt sufficient evidence to support its claims for roughly $3 million in equitable adjustments. MK has demonstrated on appeal that GIT presented virtuallyno evidence to show how MK’s misdeeds or omissions caused the specific costs which GIT claimed as equitable adjustments. Nor did GIT make any showin g that those costs were reasonable and allowable. GIT summarized its damage claims in several tables. It supported these tables with six boxes of invoices, petty cash recor ds, canceled checks, payroll35

Ref. No. Claim Description Damages 1 Equitable Adjustment: Excess GIT Management Damage s $373,682.28 2 Equitable Adjustment: Interference Damages $636,829 .78 3 Equitable Adjustment: SCN–006 Asbestos Debris $1,03 2.89 4 Extra Compensation Claim: Wrongful-Termination Dam ages $4,730,407.31 5 Equitable Adjustment: Weather Delay Damages $7,221. 38 6 Equitable Adjustment: North Continent Impact Damag es $1,143,175.21 7 Equitable Adjustment: Breach of Contract Damages $1 64,004.00 8 Equitable Adjustment: Quantity Variation Damages $3 76,038.18 9 Equitable Adjustment: Permit Impact Damages $270,94 8.55 GIT’s Subtotal “A”: $7,703,339.58 The rest of the master summary listed each sub’s t otal damages, tallied them as “Subtotal ‘B,’” which was $3,660.886.78, and added the subtotals to yield “GIT’s Total Damages to Date” of $11,364,226.36. -48- records, and the like. GIT’s final master damage s ummary, which is substantially reproduced in the margin, 35 listed eight “equitable adjustment” claims, which totaled roughly $3 million. It also included a nin th claim, for “Extra Compensation: Wrongful Termination Damages,” of rou ghly $4.7 million. GIT submitted a second-level breakdown for each of its nine claims. The breakdowns divided each claim into two to nine items. GIT’s lone damage witness, Kip Cooper, directed GIT ’s accounting department and oversaw the company’s financing. Hi s main function as a witness was to sponsor GIT’s damage exhibits. He very brie fly explained what each of the nine breakdowns comprised, and how the summary related to the breakdowns.-49-

He also summarized the types of supporting document s for each category of damages, and laid a foundation for the documentatio n’s admission into evidence by testifying that GIT had created the records in t he ordinary course of business. Cross-examination established that Cooper had not b een directly involved in deciding to allocate to the project the costs as sembled in the six boxes of documentation. Nor had Cooper been involved in eva luating how MK had caused GIT to incur those costs, or whether they were reas onable. GIT personnel on site in Colorado, rather than in the Pennsylvania office where Cooper works, had apparently made those decisions. Cooper said at on e point, “I cannot tell you what was going through their heads out there at the site, why this was charged to the project.” And later, in discussing an item cha llenged by MK, he said, “I’m here to tell you it’s a direct job cost. I don’t k now the reasoning behind it.” GIT thus presented only one witness to support a ro ughly $3 million claim for eight equitable adjustments, and that witness l acked direct knowledge of the project. He did not know, in particular, how MK’s alleged errors and omissions might have caused GIT to incur increased costs not contemplated in the contract. Beyond Cooper’s foundational testimony, GIT present ed only a damage summary, a two- to nine-item breakdown for each equitable ad justment, and six banker’s boxes of time sheets, checks, cash logs, invoices, and similar raw material. It simply did not make any showing of how MK, by delay ing or complicating or increasing the work required by the contract, cause d GIT to incur specific costs.-50-

Nor did it show why those costs were reasonable. G IT has not met its burden of presenting “specific, persuasive evidence or analys is demonstrating how any government action . . . caused [its] overruns.” Hoffman Constr. Co. of Ore. v. United States , 40 Fed.Cl. 184, 201 (Fed.Cl. 1998), aff’d in relevant part , No. 98–5075, 1999 WL 37411, at *1 (Fed.Cir. Jan. 22, 19 99). “A contractor must present more than general, unsubstantiated pronounc ements from its own witnesses that various acts of the government cause d . . . overruns.” Id. (citing Luria Bros. & Co. v. United States , 369 F.2d 701, 713 (Ct. Cl. 1966)). GIT’s attempt to rebut MK’s argument on appeal is i nadequate. GIT notes MK’s “repeated admissions” of its “failure to pay G IT for the contract work and extra work.” GIT cites parts of the record that ev ince MK’s refusal to pay GIT for some completed work under the contract and for some additional work that MK ordered after it had terminated GIT. The eviden ce to which GIT points, however, establishes at most that MK caused GIT some damages by refusing to pay it for completed contract work and some post-te rmination work. Unpaid contract work and unpaid post-termination work, how ever, comprised only about $1.25 million of GIT’s total claim of over $11 mill ion. MK’s failure to pay GIT for some of its work under the contract has nothing to do with whether MK caused GIT to incur roughly $3 million in additiona l costs unanticipated by the contract but recoverable as equitable adjustments. MK allegedly caused GIT to incur those costs not by refusing to pay it for work, but by delaying the work or36 GIT also claims that MK admitted a liability of at least $7 million when it

“reported to the DOE [Department of Energy] that . . . GIT was entitled to recover [$7,115,381].” GIT cites only a document that MK ap parently created for DOE, titled “Estimated Termination Costs if [MK’s] Contr act is Terminated [by DOE].” The document does list $7,115,381 under “Lawsuit Li abilities.” A comment reads, “Dollars value from GIT letter, to DOE Contr acting Office.” MK did not thereby admit its liability to GIT. MK simply told DOE about GIT’s own valuation of its claim, as an estimate of MK’s potentialliability. -51- misinterpreting the specifications. Similarly, MK’ s refusal to pay GIT for completed work has nothing to do with whether GIT p roved that the additional costs for which GIT claimed equitable adjustments w ere reasonable. GIT repeats its error in attacking another of MK’s arguments. MK asserts that some of GIT’s increased costs were due to mist akes made by GIT and its subs, for which MK was not responsible. GIT respon ds that MK “simply ignores the overwhelming evidence demonstrating that MK kno wingly failed to pay GIT.” But again, this court may assume that GIT suffered some damages because MK refused to pay for completed work. That does not m ean that the additional costs for which GIT sought equitable adjustments were notin part caused by GIT itself, or by its subs. 36
2. The Contract Did Not Allow GIT to Recover on Behalf of Its Subs Without Having First Settled Their Claims The contract allowed MK to terminate GIT either forconvenience or default. If MK terminated GIT for default and a co urt found the termination wrongful, then the termination would convert to one for convenience. GP 55, the standard termination-for-convenience clause for fix ed-price construction37 In its pre- and post-verdict motions for JMOL, MK o bjected to the subs’

claims on sufficiency-of-the-evidence grounds, but did not claim that GP 55F(1)(b) barred the claims as a matter of law. GI T asserts that this failure precludes MK from so arguing on appeal. It does no t. MK made its argument in the jury-instruction conference, proposed a special -verdict form reflecting its view, and objected to the court’s rejection thereof. Whether the contract bars the (continued...) -52- contracts, established MK’s and GIT’s duties after such a termination. See 48 C.F.R. § 52.249–2. The clause obliged GIT to termi nate its subcontracts, entertain termination-settlement proposals from its subs, and settle their claims. GIT would then make its own termination-settlement proposal to MK, and they would negotiate a settlement. GIT’s proposal to MKwould presumably include the costs it had incurred in settling and paying it s subs’ claims. Because MK terminated GIT for default, however, the parties did not follow that procedure. GIT never settled with or p aid three of its four subs. GP 55F(1) set forth MK’s obligations if it terminated GIT for convenience but then could not reach a settlement with GIT. Among scenarios contemplated by the contract, that is the closest analogue to what occu rred. For work performed before termination, GP 55F(1) obliged MK to pay GIT “(a) [t]he cost of this work; [and] (b) [t]he cost of settling and paying t ermination settlement proposals under terminated subcontracts that are properly chargeable to the terminated portion of the [contract] if not included in subpar agraph F(1)(a) above.” MK argues that GP 55F(1)(b) bars GIT from recovering o n its subs’ claims unless it has “settled and paid” those claims. 3737 (...continued)

subs’ unsettled claims is a question of law, not of the sufficiency of evidence. MK thus did not have to raise it in a motion for JM OL to preserve it for appeal; its objections to the verdict form suffice. See Ruyle v. Continental Oil Co. , 44 F.3d 837, 841 (10th Cir. 1994) (“A party who proper ly raises an issue of law before the case goes to the jury ‘need not include the issue in a motion for [JMOL] in order to preserve the question on appeal. ’” (quoting Landes Constr. Co. v. Royal Bank of Can., 833 F.2d 1365, 1370 (9th Cir. 1987)); Cleveland v. Piper Aircraft Corp. , 890 F.2d 1440, 1456 (10th Cir. 1989) (holding that proposal of special-verdict form, and objection to form usedby court, preserved for appeal any errors in form to which party had objected, “ev en though such asserted errors were not made the bases of a motion for [JMOL]”). -53- Two decisions by the Armed Services Board of Contra ct Appeals hold that contract provisions like that at issue here require settlement. One says that, “[a]bsent either actual payment or binding settleme nt agreements, the vendors’ termination claims are not allowable in the termination settlement.” Murdock Mach. & Eng. Co. of Utah , ASBCA No. 42891, 93–1 B.C.A. (CCH) ¶ 25,329, at 126,195, 1992 WL 206519 (1992), aff’d in relevant part sub nom. Dalton v. Murdock Mach. & Eng. Co. of Utah , No. 93–1440, 1994 WL 51573, at *1 (Fed. Cir. Feb. 22, 1994) (unpublished disposition). The other quotes a predecessor of the clause at issue here and reads it to require ei ther payment or settlement: [T]he Termination for Convenience clause . . . perm its recovery by appellant of “the cost of settling and paying claim s arising out of the termination of work under subcontracts or orders . . . .” In the absence of any evidence that appellant either settl ed or paid the claims of the two subcontractors, we deny the propo sed amount representing settlement with the subcontractors in its entirety. Atlantic, Gulf & Pac. Co. of Manila , ASBCA No. 13533, 72–1 B.C.A. (CCH) ¶ 9415, at 43,745, 1972 WL 1390 (1972).-54-

A recent Court of Federal Claims opinion necessaril y implies that a contractor who seeks to recover on its subs’ claims must have settled, but need not have paid, those claims. See McDonnell Douglas , 40 Fed.Cl. at 555 & n.18. The court approvingly quoted part of the Government ’s brief. The passage described unsettled subcontractor claims as non-inc urred, contingent costs, which the FAR disallows: “The Government challenges plaintiffs' claim for ap proximately $26 million in contingent costs not yet incurred. Thes e contingent costs are primarily for program security costs, settlement expenses, and settlement with remaining subcontractors . These costs are unallowable. ‘Pursuant to FAR [§] 52.249-2. Termin ation for Convenience of the Government (Fixed-Price) the contractor may recover costs incurred in the performance of the work.’ Sterling Millwrights, Inc. v. United States , 26 Cl.Ct. 49, 112 (1992) (emphasis added). Moreover, cost principles expressly prohib it, in FAR Part 31, recovery of non-incurred, contingent costs. See FAR [§] 31.205–7(a) and 7(b).” Id. at 555 n.18 (first emphasis added). This part of the opinion, titled “Yet To Be Incurred Costs,” went on to note that “McDonnell Do uglas has reached a settlement with [one sub] since the time of trial. Thus, $5 million [the amount of the settlement] is no longer a cost yet to be incur red.” Id. at 555. The court then proceeded to disallow a claim “for four unsettled s ubcontractors.” Id. The court’s dispositions, and its quotation of the Government’s brief, necessarily imply that pass-through claims under st andard termination-forconvenience clauses require settlement, but not pay ment. The court disallowed claims on behalf of “unsettled subcontractors.” Itallowed a claim, however,-55-

based on the contractor’s post-trial “settlement” w ith a sub. It did not indicate whether the contractor had paid the latter sub, and did not suggest that it mattered. Such a rule accords with the FAR’s definition of a contingency as “a possible future event or condition . . ., the outco me of which is indeterminable at the present time.” 48 C.F.R. (FAR) § 31.205–7(a). That section of the FAR, which is among those expressly incorporated by the contract, provides that “[c]osts for contingencies are generally unallowabl e for historical costing purposes because such costing deals with costs incu rred and recorded on the contractor’s books.” Id. at § 31.205–7(b). Once a contractor has entered a binding settlement agreement with a sub, the cost t o the contractor of the sub’s claim is no longer contingent. It is not necessaryto have paid a cost in order to have “incurred and recorded” it. A settlement agre ement, moreover, greatly reduces the risk that a contractor will recover fro m the government on a sub’s behalf but then not pay the sub. A settled-but-not-paid requirement, finally, also a ccords with the longestablished rule that a contractor need not pay its sub before making a claim on its behalf. See George Leary Constr. Co. v. United States , 63 Ct. Cl. 206, 223, 1927 WL 2960 (1927) (“It is easy to forecast the financi al ruin of a Government contractor if the rule is to be established that he may not receive amounts due from the Government under his contract until he est ablishes . . . that he has paid-56-

his subcontractor all he owes him.”); see also Severin v. United States , 99 Ct. Cl. 435, 443, 1943 WL 4198 (Ct.Cl. 1943) (holding that, if contractor is liable to sub, “that liability, though not yet satisfied by paymen t, might well constitute actual damages to [the contractor], and sustain their suit ” under rule that contractor may only sue to recover its own damages). Learyand Severin strongly suggest that, while the termination-for-convenience clause in thi s case may require GIT to have settled its subs’ claims, this court should be leery of interpreting that clause to require that GIT have settled and paid those claims. MK has never argued that GIT had to have settled orpaid its subs’ claims. GIT’s brief thus responds only to the argument thatit must have “settled and paid” the claims. GIT makes two counterarguments. One is that the Severin doctrine allows a prime contractor to sue on its su b’s behalf so long as the prime “has reimbursed . . . or remains liable ” to the sub . J.L. Simmons Co. v. United
States , 304 F.2d 886, 888–89 (Ct. Cl. 1962) (discussing Severin ) (emphasis added). The second is that, even if GIT cannot rec over on the subs’ unsettled claims under subparagraph F(1)(b), it can recover those claims as part of “the cost of this work” under subparagraph F(1)(a). The Severin doctrine is, strictly speaking, irrelevant to whet her the contract allows GIT to assert its subs’ claims. Severin is a federal-common-law doctrine that prevents a prime contractor from making claims against the government on its sub’s behalf if the sub has released it from li ability. See Severin , 99 Cl.Ct. at-57-

443–44; see also George Hyman Constr. Co. v. United States , 30 Fed.Cl. 170, 173–74, 177 n.14 (1994) (discussing and affirming c ontinued validity of doctrine). Severin only sets a limit, based on privity of contract an d sovereign immunity, on contractors’ ability to press subs’ cl aims against the government. See George Hyman , 30 Fed. Cl. at 173. The Severin doctrine does not barGIT’s claim, but it can not affirmatively enable that claim if the contract itself bars it.
Severin is nonetheless part of the body of law applicable to government procurement, which the contract incorporates. It m ay be relevant in determining how to interpret the contract. That includes how t o interpret the “cost of this work” clause, on which GIT’s second argument depend s. Courts have strictly limited the Severin doctrine, out of reluctance to leave subs with valid claims out in the cold. Courts hav e applied Severin only if the government proves that a sub has executed an ironcl ad, unconditional release of a prime. See, e.g. , Simmons , 304 F.2d at 888–89; Folk Constr. Co. v. United States , 2 Cl.Ct. 681, 685 (1983) (collecting cases). See generally Henry R. Kates, Facilitating Subcontractors’ Claims Against the Gov ernment Through the Prime Contractor as the Real Party in Interest , 52 Geo. Wash. L. Rev. 146, 152–55 (1983). Post- Severin opinions often interpret releases and contracts ve ry generously in order to let primes press their subs’ claims. See Kates, supra , at 151–59. Those opinions also allow primes to rely o n settlements with subs in which the prime’s liability is conditional. In suc h agreements, the sub releases38 The oft-quoted Simmons opinion expressly requires only that a prime

“remain[] liable” to its sub. 304 F.2d at 888–89. It does not require that the prime have reduced that liability to a binding sett lement agreement. -58- the prime from any liability, and the prime promise s only that it will press the sub’s claim against the government and pay the sub whatever it recovers. See
Simmons , 304 F.2d at 890; Kates, supra , at 155 n.80 (collecting similar cases). These opinions suggest that the courts which resolv e most federal-contracting cases might broadly interpret the “cost of this work” clause if necessary to avoid leaving the subs unable to recover their costs. GIT, however, has not cited any Severin case addressing whether the “cost of this work” clause, or federal-contracting law ingeneral, allows a prime to recover its sub’s costs without having settled withthe sub. Courts applying
Severin have neither expressly required a “settlement” norspecified that one is
unnecessary. 38 That leaves this court free to interpret this con tract to require a settlement. And while post- Severin courts have generously interpreted contracts in order to avoid leaving subs unable to recover, G IT’s subs are in no such danger. If this court reads the termination-for-co nvenience clause to require a settlement, then GIT and its subs can negotiate settlements, and GIT can then press the subs’ claims. GIT’s Severin argument thus cannot itself justify recovery on the subs’ claims, and cannot aid GIT’s “cost of this work” argument. GIT’s brief focuses on Severin . It does not discuss why this court should read the “cost of this work” clause to permit GIT t o recover its subs’ unsettled39 See 48 C.F.R. § 49.108–3(c) (governing review of prime ’s settlements

with subs); see, e.g., General Elec. Co. , ASBCA No. 24111, 82–1 B.C.A. (CCH) ¶ 15,725, at 77,806, 1982 WL 7083 (1982) (approving bottom-line settlement amount “considered by [prime and sub] to be a fair . . . compromise price . . . arrived at after arm’s length bargaining, without c ollusion, and [based on] a sound exercise of prudent judgment by [prime]”); Codex Corp. v. United States , 226 Ct. Cl. 693 (1981) (remanding for reconsideration becau se board strictly applied cost principles to settlement) . See generallyCibinic & Nash, supra, at 1114–15; Gov’t Contract Deskbook, supra, at 326.

40 “[B]usiness judgment, as distinguished from strict accounting principles, is the heart of a settlement.” 48 C.F.R. § 49.201( a). The regulation goes on to (continued...) -59- claims. Nor does it cite authority for such a read ing. It simply notes that the subs’ claims are for costs incurred in the work. M K replies by invoking the interpretive principle that courts should harmonize and give effect to every provision of a contract. For GIT to press its subs ’ claims under paragraph F(1)(b), it must have settled those claims. If thi s court nonetheless reads paragraph F(1)(a) to allow GIT to press its subs’ u nsettled claims, MK argues, it would rob paragraph F(1)(b) of any effect. MK is not entirely correct. It is easier for a pri me to settle with a sub and then recover the amount of the settlement under the “settling and paying” clause than it would be to pursue recovery under the “costof this work” clause. If a prime has settled with its sub, then the governmentmust accept the settlement’s amount, within a broad range of reasonableness. 39 A termination settlement need not strictly adhere to FAR cost principles. See 48 C.F.R. §§ 49.201 & .303–5(d); 40 see also id. at § 49.113; 48 C.F.R. pt. 31. A prime seeking to recover40 (...continued)

specify that the parties may agree on a total settl ement amount “without agreeing on or segregating the particular elements of costs or profit,” and that “[i]n appropriate cases, costs may be estimated, differen ces compromised, and doubtful questions settled by agreement.” 48 C.F.R. § 49.20 1(b)–(c). Settlements also require less record keeping. See id. at § 49.201(c). -60- the costs of settling with a sub under the “settledand paid” clause thus need not strictly prove the allowability, reasonableness, an d allocability of all of the sub’s costs. But if a prime sought to recover its sub’s costs directly as a “cost of this work,” without a settlement, then the cost-accounti ng principles of part 31 would apply to the claimed costs without any relaxation. To allow a prime to recover its subs’ costs under the “cost of this work” clause would thus not deny all effect to the “settling and paying” clause. Such a n interpretation, however, would weaken the incentive for a prime and sub to settle before the prime makes a claim against the governme nt. It would thus undermine the prime’s duty to conclude such settlements. MK bolsters its argument by asserting that the “cos t of this work” cannot include unpaid, contingent costs. FAR cost princip les support this argument. As noted above, those principles define a contingency as a possible future event or condition arising from causes whose outcome is not now determinable. See 48 C.F.R. § 31.205–7(a). “Costs for contingencies,” the FAR provides, “are generally unallowable for historical costing purpos es.” Id. at § 31.205–7(b).-61-

Ultimately, whether the subs’ costs are unallowable “costs for contingencies” depends on the perspective from whic h they are viewed. From GIT’s perspective, its liability to the subs is ind eed contingent. GIT’s liability depends on the currently indeterminable outcome of its negotiations and litigation with the subs. MK stresses this perspective. But from the subs’ perspective, their costs are not contingent: they have already incurr ed those costs. GIT stresses that perspective. The subs’ claims , in short, are contingent, but the costs included in the claims are not. Focusing only on the language of GP 55F(1)(a), GIT’ s position seems stronger. The paragraph refers to “cost,” not “cla ims”; the subs incurred “costs” for the “work.” But considering GP 55F as a whole and, more broadly, the structure of termination settlements, MK’s positionis stronger. GP 55F provides in relevant part that, If [GIT] and [MK] fail to agree on the whole amountto be paid [GIT] because of the termination of work, [MK] shal l pay [GIT] . . .: (1) For Subcontract work performed before . . . term ination . . .: (a) The cost of this work; (b) The cost of settling and paying termination sett lement proposals under terminated subcontracts . . .; [and ] (c) A sum, as profit on subparagraph F(1)(a) above, determined . . . to be fair and reasonable. GP 55F thus focuses on which of GIT’s costs MK must pay. The “cost of settling and paying” under F(1)(b) can of necessity refer on ly to GIT’s cost, not a sub’s.41 See 48 C.F.R. § 49.108–2(c) (measuring reasonableness of prime’s

settlement with sub by amount due to sub under stan dard termination-forconvenience clause, which includes profit); see also id. at § 49.502(e) (suggesting that primes insert standard termination-for-conveni ence clause in subcontracts)).

42 See also 48 C.F.R. § 49.502(e)(1) (recommending that prime include standard termination-for-convenience clause in its subcontracts, with “the period[] reduced for submitting the subcontractor’s termination settlement proposal (e.g., 6 months)”). The FAR thus envision s a set of contracts under which subs must submit termination-settlement propo sals to primes within six months, while primes have a year to submit their pr oposals to the government. See 48 C.F.R. § 52.249–2(e). A prime can thus satisfy its duty to settle with a sub and have several months to incorporate that settlement in its own settlement proposal to the government. -62- The “profit” allowed by F(1)(c) is GIT’s profit. T he reasonable profit earned by GIT’s subs should be part of their settlements withGIT. 41 It would be inconsistent to read “cost” in F(1)(a) to mean “cos t incurred by GIT or by its subs” when “cost” in F(1)(b) necessarily means “cos t incurred by GIT,” and “profit” in F(1)(c) means “profit earned by GIT.” More broadly, the standard federal termination-for- convenience clause, which is reproduced in GP 55, requires terminated c ontractors to settle with their subs. See 48 C.F.R. § 52.249–2(b)(5). A terminated contract or will thus liquidate its subs’ claims and consolidate those claims with its own into a single settlement proposal to the government. See id. at § 52.249–2(e). 42 This approach reflects the general policy of federal-contracting law, whic h favors settlement over unilateral determination of termination damages. See 48 C.F.R. § 49.103.-63-

The FAR contains not only standard termination clau ses for federal contracts, but principles to govern terminations. See 48 C.F.R. pt. 49. The principles governing settlements with subcontractor s begin by stressing the wellsettled rule that a sub cannot sue the government d irectly. See 48 C.F.R. § 49.108–1; see generallyKates, supraat 146 & n.4 (collecting cases). The same section then notes that a prime is “responsible forthe prompt settlement of the settlement proposals of [its subs].” 48 C.F.R. § 4 9.108–1. The statements’ conjunction emphasizes that a sub must recover its costs by settling with the prime, not by directly suing the government. In th is case, while the subs have not directly sued MK, it would nonetheless significantl y undermine the FAR’s settlement structure to accept GIT’s theory. That theory suggests that, while a prime must settle with its subs, and while the subs may not sue the government to recover their costs, the prime may nonetheless sue the government to recover the subs’ costs without first having settled with the s ubs. FAR § 49.108–6 provides further evidence of the FAR ’s presumption that a contractor will settle its subs’ claims before it s ettles its own claim with the Government. The subsection provides that, if a pri me’s inability to settle with a sub delays the settlement of the prime contract, th e Government may settle with the prime. In so doing, however, the Government “s hall except the subcontractor settlement proposal from the settlement in whole orpart and reserve the rights of the Government and the prime contractor with respec t to the subcontractor43 Neither party has pointed to this provision or sugg ested that it legally

controls any aspect of this case; this court simplynotes it as evidence that the FAR’s structure presumes a requirement that prime c ontractors settle their subs’ claims before presenting their own claims to the go vernment. -64- proposal.” 48 C.F.R. § 49.108–6. If a prime could directly recover its sub’s costs under the “costs of this work” clause, there would be no need for a procedure to address situations in which a prime’s inability to settle with a sub delayed its settlement with the government. 43 The more natural reading of the two disputed paragr aphs is that F(1)(b), the one that expressly refers to subs’ claims, encompas ses those claims, while F(1)(a) does not. This interpretation will not keep the su bs in this case, or those in future wrongful-default-termination cases, from recovering their costs. In this case, a new trial is necessary, as discussed below. GIT an d its subs can conclude settlements before that trial. Cf. McDonnell-Douglas , 40 Fed.Cl. at 555 (holding that contractor’s claim on behalf of sub became val id after contractor entered post-trial settlement agreement). In future cases, primes and subs should know of the need to settle the subs’ claims before the prim e makes a claim against the government. D. Remedy on Appeal for the Erroneous Submission to the Jury of GIT’s Attorney’s Fees, Equitable Adjustment, and Subcontr actor Claims This court has concluded that the trial court erred in denying MK’s motion for judgment as a matter of law (JMOL) as to three of GIT’s five major categories of damages. Such a conclusion generally leaves thi s court three options: (1) order-65-

the entry of JMOL ourselves, (2) order a new trial ourselves, or (3) remand to let the district court decide between the first two opt ions. See 9A Charles Alan Wright & Arthur R. Miller, Federal Practice and Procedure § 2540, at 370–72 (2d. ed. 1995) (citing Neely v. Martin K. Eby Constr. Co. , 386 U.S. 317, 327–30 (1967)). Had the trial court used a special-verdict form, orsupplemented the general-verdict form with special interrogatories, this court could possibly untangle the various categories of damages claimed and awarded below. We could then vacate any award of damages on the attor ney’s-fees, equitableadjustment, and subcontractor claims, while letting stand any amounts the jury had awarded on GIT’s other claims. See, e.g. , Bone v. Refco, Inc. , 774 F.2d 235, 242–43 (8th Cir. 1985) (“Had Bone’s claims been sub mitted on special verdicts, we could simply have stricken the award on the [imp roper] claim and affirmed the judgment on the other claims.”); cf. Neely , 386 U.S. at 329 (authorizing courts of appeals to order entry of JMOL on appeal from denia l thereof). The district court, however, used a general-verdict form. It si mply allowed the jury to award a lump sum if GIT prevailed on its wrongful-termination counterclaim. The “general rule . . . is that when one of two or more issues submitted to the jury was submitted erroneously, a general verdi ct cannot stand.” Farrell v. Klein Tools, Inc. , 866 F.2d 1294, 1298–99 (10th Cir. 1989) (citing Sunkist Growers, Inc. v. Winckler & Smith Citrus Prods. Co. , 370 U.S. 19, 29–30 (1962)).44 MK’s failure to move for a new trial does not forec lose that option. “‘In

an appeal from the denial of a motion for a judgmen t notwithstanding the verdict an appellate court may, in appropriate circumstance s, instead order a new trial.’” Magnum Foods, Inc. v. Continental Cas. Co. , 36 F.3d 1491, 1502 n.13 (10th Cir. 1994) (quoting Firestone Tire & Rubber Co. v. Pearson , 769 F.2d 1471, 1480 (10th Cir. 1985) (citing Neely , 386 U.S. at 329)). -66- In this case, in which it was error to submit to th e jury three of GIT’s five major categories of damages, accounting for almost three- fourths of its total claim, the need to apply the general rule is patent. See Blanke v. Alexander , 152 F.3d 1224, 1232 (10th Cir. 1998) (noting that general rule wou ld apply if court had let jury consider element of damages unsupported by sufficie nt evidence); see, e.g. , Bone , 774 F.2d at 242–43 (ordering new trial on damages b ecause court used general verdict and erred in submitting one of three damage claims to jury). Because the general verdict makes it impossible to enter a judg ment in GIT’s favor on only part of the jury’s verdict, a retrial is the only v iable option. 44 That conclusion leaves two questions about the scop e of a new trial. The first is whether it should be limited to the issue of damages, or should include all issues. The second is whether GIT’s failure to introduce sufficient evidence of certain types of damages warrants the entry of a JM OL in MK’s favor on those claims, precluding GIT from pressing them on remand

. 1. The New Trial Will Be Limited to the Issue of Damages If confusion or failures of proof regarding damages do not affect a jury’s determination of liability, this court may limit a new trial to the issue of damages.-67-

See Magnum Foods, Inc. v. Continental Cas. Co. , 36 F.3d 1491, 1497, 1506–07 (10th Cir. 1994); Firestone Tire & Rubber Co. v. Pearson , 769 F.2d 1471, 1480 (10th Cir. 1985) (citing Brown v. Richard W. Wacholz, Inc. , 467 F.2d 18 (10th Cir. 1972)). Courts of appeals have broad discreti on in deciding whether to limit the issues when remanding for a new trial. See Yehia v. Rouge Steel Corp. , 898 F.2d 1178, 1184–85 (6th Cir. 1990); Kuehne & Nagel v. Geosource, Inc. , 874 F.2d 283, 293 (5th Cir. 1989); Hasbrouck v. Texaco, Inc. , 663 F.2d 930, 933 (9th Cir. 1981) (citing Heckman v. Federal Press Co. , 587 F.2d 612 (3d Cir. 1978)). MK argues that this court cannot limit a new trial to the issue of damages, because that issue is not distinct and separable fr om the issue of liability. MK thus invokes the Gasoline Products exception to the general rule that a court may limit a new trial to specific issues. See Mason v. Texaco, Inc. , 948 F.2d 1546, 1552 (10th Cir. 1991) (noting that it must “‘clearl y appear[] that the issue to be retried is so distinct and separate from the others that a trial of it alone may be without injustice’” (quoting Gasoline Prods. Co. v. Champlin Refining Co. , 283 U.S. 494, 500 (1931))). Courts and commentators have interpreted Gasoline Products to require full retrials in two instances. The first, and more com mon, is when an error or insupportable damages award calls into question the propriety of the original jury’s finding of liability. The most common examp le is a compromise verdict, i.e., an award of suspiciously low damages in a cas e of closely contested liability

.45 MK argues on appeal that the jury reached a comprom ise verdict, but MK

waived that argument by failing to move the distric t court for a new trial on that ground. Unlike the grounds urged in MK’s pre-verdi ct motions for JMOL, on the basis of which this court may order a new trial, th e compromise-verdict ground can by definition arise only after a verdict. A pa rty must therefore preserve that ground by moving for a new trial after the verdict. See Martin H. Redish, New Trials; Amendment of Judgments, in Moore’s Federal Practice 3d § 59.55, at 59–136 (1997) (“Grounds for new trial that arise so lely in the context of post trial proceedings must be presented to the trial court fo r consideration by a motion for new trial, and the failure to do so deprives the ap pellate court from [ sic ] any record that is reviewable for error.”). -68- See, e.g. , National R.R. Passenger Corp. v. Koch Indus., Inc. , 701 F.2d 108, 110 (10th Cir. 1983); 11 Wright & Miller, supra, § 2814, at 154–56. 45 The second rationale for requiring a retrial on all issues doe s not look back to the propriety of the original jury’s finding on liability. It inste ad looks forward to the new jury’s inquiry. That rationale bars a limited retrial whe n two issues are inextricably intertwined. If a district court were to retry onl y one of two such intertwined issues to a second jury, while maintaining the vita lity of the first jury’s findings on the other issue, it would cause confusion and un certainty and, thus, an unfair trial. See Gasoline Prods., 283 U.S. at 500; 11 Wright & Miller, supra , § 2814, at
156–57 & n.14. Such was the rationale of Gasoline Products , a breach-of-contract case in which the Court held that the court of appeals coul d not limit the retrial to the issue of damages . See 283 U.S. at 500. The Court noted that the first ju ry’s overall verdict of liability had not included findi ngs on such subsidiary issues as the dates of contract formation and breach, and the extent of the promised-69-

performance. See id . A second jury would have to know those facts to calculate damages for lost profits. See id . The Court held that “the question of damages . . . is so interwoven with that of liability that the former cannot be submitted to the jury independently of the latter without confusion and uncertainty, which would amount to a denial of a fair trial.” Id. MK notes that the jury’s determinations as to wheth er MK or GIT had caused various delays are relevant both to the wron gfulness of the termination and to GIT’s entitlement to equitable adjustments. MK analogizes those two issues to liability and damages in a common-law breach-of-contract suit, and notes that the general verdict makes it impossible to determine wh ich party the jury found responsible for any given delay. That problem is s uperficially similar to the problem in Gasoline Products , where it was impossible to discern the jury’s subsidiary findings about the breached contract. See 283 U.S. at 500. MK raises a valid point, but its argument is very b rief. MK never argued this point to the trial court, as it never moved fo r a new trial. Nor on appeal does it explain exactly how, in a retrial limited to dam ages, the common issues would cause a jury such “confusion and uncertainty” as to preclude a fair trial. Id

. This court has not articulated any test more detail ed than that stated in Gasoline Products for analyzing whether the issue of damages is clear ly distinct and separable from that of liability in a given cas e. This court has not been hesitant, however, to find damages to be a distinctand separable issue. In a 1977-70-

Federal Employer Liability Act (FELA) case, the tri al court erroneously instructed jurors that, if they found the employer negligent, they should include medical expenses in the employee’s damages. See Trejo v. Denver & Rio Grande W. R.R.
Co. , 568 F.2d 181, 183 (10th Cir. 1977). There was no evidence of such expenses, and the employee had waived any claim to them . See id . The jury’s general verdict awarded a lump sum for damages. See id

. In addressing whether to remand “for another full trial” or for “retrial only on the question of damages,” this court first notedthe rule that “damages and contributory negligence [are] normally so interwove n in a FELA case that it would rarely be proper ‘to submit to a jury the que stion of damages without also permitting them to consider the conduct of the plai ntiff.’” Id. at 184 (quoting Norfolk So. R.R. Co. v. Ferebee , 238 U.S. 269, 273 (1915)). Nonetheless, this court noted that the jury’s verdict had two parts, a finding “in favor of the plaintiff,” and an award of damages. We saw no rea son to relitigate the first part’s implicit finding that the company had been n egligent: “Where, as here, we can protect the plaintiff’s interest in the determi nation of liability without prejudicing the rights of the defendant, we should do so.” Id. at 185. This court ordered that, on remand, the district court should instruct the jury that the company’s liability “has been conclusively adjudicated”; that the company had to prove the employee’s contributory negligence, if any; and that the employee “may counter with evidence of the Company’s negligence f or consideration by the-71-

jurors in determining the comparative negligence of the parties.” Id. This court thus ordered that a jury could consider, solely forthe purpose of measuring damages, precisely the same issue of negligence on which liability had turned. This court took a similar approach in a 1985 fraud case, in which it affirmed the verdict of liability, but remanded wit h directions to enter a remittitur order or conduct a new trial limited to the issue o f damages. See K–B Trucking Co. v. Riss Int’l Corp. , 763 F.2d 1148, 1162–63 (10th Cir. 1985). This co urt did so even though the measure of damages depended in p art on the same factual issue as liability: what representations the defend ant had made to the plaintiff. In this case, the overlap of the factors bearing on damages and liability is significantly less complete than in Gasoline Products . In calculating damages, the second jury will not have to answer the same qu estions about who was responsible for each delay as the first jury had to answer in deciding liability. Each delay was caused either by GIT, by MK, or by s omething other than GIT or MK (by “chance,” hereinafter). To show that a delay was excusable, and thus helped make the default-termination wrongful, GIT o nly had to prove that it had not caused the delay. If so, then it did not matte r whether the delay was caused by MK or by chance. But to show that a delay is co mpensable, and can entitle it to damages, GIT must show that the delay was MK’s f ault. If not, then it does not matter whether the delay was caused by GIT or by ch ance. See generallyCibinic46 While this court need not resolve the issue, the di strict court’s approach

appears correct. The default-termination clause do es not say how a default by GIT will affect GIT’s entitlement to equitable adju stments if those adjustments are based on delays caused by MK before the termination. Authority suggests that GIT remains entitled to any such adjustments. See Cibinic & Nash, supra, at 1043 (saying that, after proper default termination , government may recover from (continued...) -72- & Nash, supra, at 543–618 (comparing excusable and compensable de lays); Worthington & Goldsman, supra, § 11–8, at 392–93. This distinction between the questions relevant to liability and those relevant to damages eliminates any risk that a retr ial limited to damages will produce a verdict inconsistent with the verdict on liability. Even if the second jury finds that none of the delays were MK’s fault, and thus does not award GIT any damages based on delay, such a verdict would no t be inconsistent with the original verdict that the termination was wrongful. The two verdicts could be reconciled by assuming that there were enough excus able delays to account for GIT being behind schedule, but there were no delays which were MK’s fault and which caused GIT to incur specific, reasonable cost s. This court does not rely simply on the potential re conciliation of the original liability verdict and a damages verdict up on retrial. More importantly, we note that the district court tried the case on t he theory that GIT’s entitlement to equitable adjustments based on delays is fundame ntally separate from the question whether MK is liable for a wrongful termin ation. MK has not challenged that approach on appeal. 46 MK nonetheless argues that the issues of46 (...continued)

contractor excess costs of reprocuring work, but mu st reduce recovery to account for “all price increases to which the defaulted con tractor is entitled” (citing board of contract appeals cases, including Iran B. Tech Enter. , ASBCA No. 24820, 81–2 B.C.A. (CCH) ¶ 15,424, at 76,442, 1981 WL 7164 (198 1) (upholding default termination but awarding terminated contractor equi table adjustment))). -73- wrongful termination and equitable adjustments for delay are inextricably intertwined. That argument is substantially underc ut, however, by MK’s failure to challenge the proposition that GIT could recoverequitable adjustments based on delay regardless of whether the termination had been wrongful. There are fundamental differences between contract- termination damages under federal-contracting law, on the one hand, and breach-of-contract damages at common law, on the other. It is inapt to analogize the issues of wrongful termination and entitlement to equitable adjustment s, in this case, to the issues of liability and damages in a suit governed by common- law contract doctrine. While common-law damages can only flow from a finding of liability for breach of contract, GIT’s entitlement to “damages” in the for m of equitable adjustments did not depend upon showing that MK was “liable” for a wrongful termination. This disjuncture between liability and damages dist inguishes this case from Gasoline Products . In that case, factual findings essential to dete rmining whether a contract had been breached were equally essential to measuring damages, particularly, as the Court noted, damages for lost profits. In this case, certain factual disputes about each delay are relevant to t he issues of wrongful47 MK supports its argument by citing Colorado cases awarding nominal

damages when a party’s evidence of damages was insu fficient. See, e.g. , Colorado Inv. Svcs., Inc. v. Hager , 685 P.2d 1371, 1375 (Colo. Ct. App. 1984). While state law governs a party’s substantive entit lement to damages in a diversity case like this, it is well-established th at federal law governs the grant or denial of a new-trial motion in diversity cases, an d, at least in this Circuit, governs the determination whether evidence is suffi cient to support a verdict. See Blanke v. Alexander , 152 F.3d 1224, 1235 (10th Cir. 1998) (new-trial m otion); Bankers Trust Co. v. Lee Keeling & Assocs. , 20 F.3d 1092, 1099 (10th Cir. 1994) (sufficiency of evidence). It follows that federal law governs this court’s decision how to remedy the trial court’s error in finding GI T’s damages evidence sufficient. Cf. Firestone Tire , 769 F.2d at 1480 (applying federal law in diversi ty (continued...) -74- termination and equitable adjustments. But because those issues are essentially independent, there is little reason to think that aprior verdict of wrongful termination will confuse or inhibit a second jury i n determining the equitable adjustments, if any, to which GIT is entitled. The re is, indeed, no need to instruct the jury in the new trial on damages that the termi nation was “wrongful.” That fact is not relevant to the jury’s task of determin ing whether GIT is entitled to equitable adjustments based on delay, and in what a mount. This court thus concludes that the issue of GIT’s entitlement to eq uitable adjustments is clearly distinct and separate from the issue of the wrongfu lness of its termination.
2. This Court Cannot Direct the Entry of Judgment in M K’s Favor on GIT’s Attorney’s-Fees Claim, and Declines to Do So on Its EquitableAdjustment and Subcontractor Claims MK argues that this court should instruct the distr ict court to award nominal damages on remand, based on MK’s view that GIT did not offer sufficient evidence of any of its claimed damages. 47This court has not accepted47 (...continued)

case [ see id. at 1483], albeit without discussing choice of law, in determining whether to grant JMOL or new trial after concluding that damages evidence had been insufficient). -75- that view in its entirety. We could, however, dire ct the entry of JMOL, or an award of nominal damages, on those elements of GIT’ s claimed damages as to which a JMOL would have been proper, i.e., attorney ’s fees, equitable adjustments, and subcontractor claims. While the g eneral verdict would still necessitate a new trial on GIT’s remaining damage c laims, this court could foreclose GIT from again claiming those three items

. As for the last of those items, GIT’s subcontractorclaims, this court has concluded that the error in allowing them was one o f law, not insufficient evidence. As noted above, the Court of Federal Cla ims has indicated in at least one opinion that a contractor’s post-trial settleme nt with its sub could enable it to press a claim on the sub’s behalf. See McDonnell Douglas , 40 Fed.Cl. at 555. In this case the trial court should have required GIT to show that it had settled with its subs before allowing it to bring claims on thei r behalf. This court concludes the interests of justice require that GIT have a ch ance on remand to comply with that dictate, rather than have its claim barred. Cf. Finley v. United States , 123 F.3d 1342, 1349 (10th Cir. 1997) (holding that, bec ause trial court granted plaintiff JMOL based on erroneous legal assumption that certain defense was not-76-

available, so that defendant had no chance to prove defense, the interests of justice required a new trial rather than affirmance of JMOL). That conclusion leaves the question whether GIT canclaim on remand the attorney’s fees and equitable adjustments of which it failed to produce sufficient evidence. In Firestone Tire , an appeal involving insufficient evidence of damages, this court applied the general federal rul e: “In an appeal from the denial of a motion for [JMOL] an appellate court may, in appropriate circumstances, instead order a new trial.” 769 F.2d at 1480 (citi ng Neely , 386 U.S. at 329). To apply that rule to the attorney’s-fees and equitabl e-adjustment issues in this case, however, is to give GIT a second bite at the apple, i.e., a second chance to marshal the evidence it failed sufficiently to pres ent in the first trial. The force of that argument is particularly clear as regards GIT’s egregious failure to timely produce any evidence of its attor ney’s fees. Despite its force, however, the argument is foreclosed. MK failed to renew its pre-verdict Rule 50(a) motion for JMOL on that issue in a post-verdi ct Rule 50(b) motion. As discussed supraat 46–47, that failure limits the relief which MK may obtain on appeal to a new trial. No such procedural lapse, however, prevents this co urt from ordering entry of a partial JMOL based on GIT’s other evidentiary failure, i.e., the failure to produce sufficient evidence of how MK caused it to incur specific, reasonable costs entitling it to equitable adjustments. MK tw ice moved for JMOL near the48 In addressing an oral JMOL motion on a different to pic which MK made

at the same time as its oral motion regarding causation of damages, the court said, “I’m going to take that one under advisement and co nsult the case law, and I’ll give GIT an opportunity to argue if I am inclined t o grant that.” -77- end of the trial on the ground that GIT’s evidence of the causation of its damages was insufficient. It made its first motion orally on the day after GIT’s damages witness testified. The court summarily denied the motion after MK’s counsel had briefly stated it. MK filed a written motion sever al days later, on the morning of the last jury-instruction conference. During the c onference, MK’s counsel briefly brought up its Rule 50 motions. After the court sa id that it had not yet had time to read the written motions, MK’s counsel noted that “[s]ome of the motions . . . we’ve presented already, i.e. . . . lack of causati on of damages.” The court immediately replied that, while there had been some new evidence since its last ruling, “there is no change in my opinion as a resu lt of the additional evidence.” In these circumstances, GIT had little occasion to try to remedy the defects in its proof. Had the court not promptly orally de nied MK’s motions, GIT could have moved for leave to reopen its case to provide additional evidence. See, e.g., McKinnon v. City of Berwyn , 750 F.2d 1383, 1388 (7th Cir. 1984). 48 Giving a party a chance to correct defects in proof is a pri mary purpose of the preverdict motion for JMOL under Rule 50(a), and in particularof the requirement that the motion specify the grounds for granting judgment. See Fed. R. Civ. P. 50(a)(2), advisory committee’s note (1991 amend.) (stating th at purpose of requirement for-78-

preverdict motion for JMOL “is to assure the respon ding party an opportunity to cure any deficiency in that party’s proof that may have been overlooked”); see also, e.g., Waters v. Young , 100 F.3d 1437, 1442 (9th Cir. 1996) (holding that either motion or court must apprise party of specif ic deficiencies in its proof, and that court must allow party opportunity to offer fu rther evidence before granting JMOL); Holmes v. United States , 85 F.3d 956, 962 (2d Cir. 1996) (noting that purpose of preverdict motion is to enable party to remedy deficiencies in proof); Parts & Elec. Motors, Inc. v. Sterling Elec., Inc. , 826 F.2d 712, 716 (7th Cir. 1987) (similar); see generally9A Wright & Miller, supra , § 2533, at 309–11 & 1998 Supp. at 63. While MK’s motions for JMOL sufficed to notify GIT of the specific deficiency in its proof, the court’s immediate reje ctions of those motions make it impossible to say whether, had the court taken the motions under advisement, GIT might have taken steps to buttress its case. This court must consider that fact in exercising its discretion to order either JMOL or anew trial. Courts of appeals have often ordered new trials rather than JMOL whena plaintiff could likely remedy its deficient evidence in a new trial. See, e.g. , Smith v. Washington Sheraton Corp. , 135 F.3d 779, 785 (D.C. Cir. 1998) (ordering new trial because “we believe Smith’s failure of proof . . . may be r emedied”); Network Publications, Inc. v. Ellis Graphics Corp. , 959 F.2d 212, 215 (11th Cir. 1992) (holding that district court erred in granting JMOL instead of new trial where-79-

insufficient proof of damage amount was likely reme diable); Persinger v. Norfolk & W. Ry. Co. , 920 F.2d 1185, 1189 (4th Cir. 1990) (similar); cf. Universal Bankcard Sys., Inc. v. Bankcard Am., Inc. , 998 F.Supp. 961, 967 (N.D. Ill. 1998) (noting that “even [if] there is a complete failure of proof on the amount of damages . . . the trial judge can order a new trial in lieu of entering judgment,” but declining to do so, because, “despite repeated warnings from me, the plaintiff made no effort to introduce such evidence. This le ads me to believe that the evidence does not exist.”). This court employed similar reasoning in Firestone Tire

. See 769 F.2d at 1480. Plaintiffs proved a breach of contract but p resented to the jury a damage calculation erroneously based on lost gross revenue , not lost profits. See id

. Noting that plaintiffs’ damages were complex and di fficult to prove, this court held that “the interests of justice require a new t rial as to the proper amount of damages, rather than a [JMOL].” Id. In this case as well, the trial was long and complex, as MK itself has stressed. The district c ourt, moreover, summarily rejected MK’s Rule 50(a) motion claiming that GIT’s evidence of equitable adjustments was insufficient, without in any way su ggesting that GIT might need to supplement its evidence on that issue. This cou rt concludes that the interests of justice require that GIT have a chance to do so before its equitable-adjustment claims are dismissed.
3. Conclusion49 GIT cross-appealed the trial court’s denial of its motion for summary

judgment on MK’s breach-of-contract claim. GIT hadargued that MK could not sue, as all funds spent on the project were the gov ernment’s, not MK’s, and MK thus had suffered no damages. Although GIT asserte d that its cross-appeal “raises an important policy issue regarding . . . s ubcontractors on federal projects,” its counsel conceded at oral argument th at, if this court affirms the verdict on liability, it will moot the cross-appeal . This court agrees. Our vacation of the award of damages, meanwhile, moots MK’s argument that the trial court erred in awarding GIT prejudgment interest onthe jury’s verdict. -80- This court will thus remand this case with instruct ions to the district court to conduct a new trial limited to the issue of dama ges. This conclusion moots the remaining issues the parties have briefed. 49 On remand, the district court should instruct the second jury to examine each of GIT’s e quitable-adjustment claims based on delay. The jury must determine whether MK caused each delay in a manner unauthorized by the contract. If so, the ju ry must further determine whether the delay caused GIT to incur allowable, re asonable, allocable costs. The jury must also, of course, resolve GIT’s other clai ms for damages, as instructed by the court in accord with the contract and releva nt law.
III. CONCLUSION This court affirms the judgment insofar as it incorporates the jury’s verdict that the default-termination was wrongful and that MK was not entitled to recover from GIT for a breach of contract or from Fireman’s Fund under the performance bond by which it insured GIT’s performance. This c onclusion eliminates any claim against Fireman’s Fund. This courtvacates the judgment insofar as it-81-

awards GIT damages on its counterclaim against MK, and remands the case for a new trial limited to that issue.