Opinion ID: 210422
Heading Depth: 1
Heading Rank: 4

Heading: Jury Verdict Award

Text: The Board rejected Grumman's jury verdict method for damages on the fourteen claims sustained by the Board. The jury verdict method is designed to produce an approximation of damages based on the entire record. Raytheon Co. v. White, 305 F.3d 1354, 1367 (Fed.Cir. 2002). In order to adopt the jury verdict method, [the Board] must first determine three things: (1) that clear proof of injury exists; (2) that there is no more reliable method for computing damages; and (3) that the evidence is sufficient for a court to make a fair and reasonable approximation of the damages. Dawco Constr., Inc. v. United States, 930 F.2d 872, 880 (Fed.Cir. 1991). This court makes clear, however, that the jury verdict method may only be used when other, more exact, methods do not apply. Id. In this case, the Board concluded that Grumman generally showed proof of injury on the sustained claims. The Board also sustained Grumman's reasonable reluctance to segregate each of its claims and prove the actual costs for each one. However, the Board concluded that this case did not warrant a mere approximation of the damages. In re Grumman Aerospace Corp., 06-1, B.C.A. (CCH) ¶ 33,216 at 164,621 (A.S.B.C.A. February 27, 2006). Because the Board's conclusion about the sufficiency of the evidence is factual, this court will uphold the Board's conclusion absent some indication that the conclusion is fraudulent, arbitrary, capricious, or so grossly erroneous as to necessarily imply bad faith. 41 U.S.C. § 609(b); Fruin-Colnon Corp., 912 F.2d at 1428-29. In its thirty-six page opinion on damages, the Board analyzed and reviewed cost information from Grumman, E & Y, and the Air Force. The Board also reviewed the Source Selection Evaluation Board's report on the proposed engineering hours from both bidders as well as the government estimate. In re Grumman Aerospace Corp., 06-1, B.C.A. (CCH) ¶ 33,216 at 164,608 (A.S.B.C.A. February 27, 2006). Based on the record, the Board found that the E & Y actual costs were not reasonable. Id. at 164,609. Specifically, Grumman offered no testimony and offered no documentary evidence related to the use of any of these quantifications, or any of the estimates or percent figures upon which the quantifications were based. Id. at 164,612. After reviewing the cost estimates from Grumman and the Air Force, the Board found adequate evidence for six of the sustained claims and awarded Grumman $387,067.00 plus interest. This court observes no abuse of discretion in the Board's findings about the lack of evidence to support a jury verdict. The Board reviewed over numerous documents and hundreds of pages of cost information as well as a great deal of testimony. For example, the record does not show any evidence to make a fair and reasonable approximation of Grumman's damages with respect to the development of a Kalman filter for the F-111A/E AMP effort. The Kalman filter record points to 8,217 man-hours expended as shown by an internal memorandum from a Grumman project software engineer. However, the memorandum did not distinguish between work within the scope of the contract and outside the needs of the contract. The subject line of the memorandum referred to underestimating tasks. As such, the Board decided that this evidence did not support a reasonable approximation of damages because Grumman's poor bidding judgment might have actually caused a part of these 8,217 man-hours. Id. at 164,619. Further, Grumman mistakenly attempted to rely on the cost figures in the contracting officer's review of Grumman's request for equitable adjustment. However, the CO's figures do not include any supporting cost data for the Board's independent review. Also, when Grumman modified its request, the CO withdrew acknowledgement of any specified damages. In any event, the Air Force did not admit liability based on the CO's cost findings. Id. at 164,622. Because Grumman has the burden to prove damages as a result of Air Force actions, the Board correctly determined that the CO's figures did not support an equitable adjustment. Last, and most important, the Board found that Grumman's damage figures relied entirely upon the E & Y report rather than on its actual costs. E & Y did not prepare the report by using an independent evaluation of the reasonableness of Grumman costs but instead relied solely on the Source Selection Advisory Council (SSAC) analysis report. However, this report, by its own terms, simply set forth acceptable parameters, rather than a calculation of actual costs. Id. at 164,607-08. Moreover, Grumman could not substantiate many of the figures in the SSAC analysis because it had prematurely destroyed important project documents. In re Grumman Aerospace Corp., 03-1, B.C.A. (CCH) ¶ 32,203 at 159,261 (A.S.B.C.A. March 14, 2003), aff'd on recon., 03-2 B.C.A. (CCH) ¶ 32,289 (A.S.B.C.A. June 23, 2003). The Board justifiably discounted some of Grumman's proofs due to its premature destruction of contract records. In sum, the record, as the Board found, did not support a fair and reasonable approximation of damages. Therefore, the Board did not abuse its discretion in denying Grumman's jury verdict method claim.