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D. The Experts
1. Paul H. Gross
Paul H. Gross (Gross) testified for petitioners relating to
the value of any research or experimentation services that were
to be provided by HJI to JDP pursuant to the R & D Agreement.
Gross is employed by American Appraisal Associates, which is
located in Atlanta, Georgia. He has professionally valued
fertilizer companies, formulations of fertilizer, application
methods of fertilizer, devices for the applications of
fertilizers, patents thereon, hybrid seed corn varietal strains,
germ plasm pools, and the like. Gross is qualified to testify in
the instant cases as an expert on valuing research and
development contracts. Gross concluded that as of December 31,
1981, the value of the R & D Agreement was $382,000.
According to Gross, the value of the contract at its
inception depended on the qualification of the contractor who
was to perform the services, the plan of activity incorporated in
the contract, and the reasonableness of the payments to be made
under the contract. In his view, HJI was qualified to perform
the research or experimentation services, based on HJI's and
Whittaker's background, their experience in operating a
commercial jojoba plantation in the Hyder Valley of Arizona, and
their contacts with qualified technical experts.
Gross used a cost approach to assess the reasonableness of
the payments under the contract. To estimate the reasonableness
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