The total cost method "looks to the difference between the amount bid for the work and the actual cost of the work." North Am. Mechanical, Inc. v. Walsh Constr. Co., 132 F.Supp.3d 1064, 1078 (E.D. Wis. 2015), citing Raytheon Co. v. White, 305 F.3d 1354, 1365 (Fed. Cir. 2002). Due to several concerns, courts have suggested that the method be used only "as a last resort ..., in those extraordinary circumstances where no other way to compute damages was feasible and where the trial court employed proper safeguards."
Two of them disprove AECOM's point because they are post-trial cases where the courts clearly allowed testimony on MCAA factors analysis. SeeN. Am. Mech., Inc. v. Walsh Const. Co. II, LLC , 132 F. Supp. 3d 1064, 1081 (E.D. Wis. 2015) (allowing a witness to testify about his MCAA factors analysis but ultimately declining to use that approach to calculate damages because the witness failed to analyze the specific conditions of the project to arrive at an appropriate inefficiency rate); Sunshine Const. & Eng'g, Inc. v. United States , 64 Fed. Cl. 346, 371 (2005) (defendant's expert testimony demonstrated that the plaintiff's expert's MCAA factors analysis was not recognized as an accepted approach by his peers or by any trade association). The third case concerned a Daubert motion, but that court clarified that it was not analyzing the type of MCAA factors analysis that Dr. Ibbs undertook.
Under Wisconsin law, a breach of contract claim has three elements: (1) a valid contract; (2) a violation or breach of the terms of that contract; and (3) damages that flow from the breach. Matthews v. Wis. Energy Corp., 534 F.3d 547, 553 (7th Cir. 2008) (citing NW. Motor Car, Inc. v. Pope , 51 Wis.2d 292, 187 N.W.2d 200 (1971) ); N. Am. Mech., Inc. v. Walsh Constr. Co. II, LLC, 132 F.Supp.3d 1064, 1071 (E.D. Wis. 2015) (quoting Matthews ). DVO does not dispute that the Digester Contract is a valid contract.