                UNITED STATES COURT OF APPEALS
                    FOR THE FIRST CIRCUIT
                                         

No. 92-2300
                  UNITED STATES OF AMERICA,

                          Appellee,
                              v.

                         AARON STERN,
                    Defendant, Appellant.

                                         
No. 93-1047

                  UNITED STATES OF AMERICA,
                          Appellee,

                              v.
                       LAWRENCE GORDON,

                    Defendant, Appellant.
                                         

        APPEALS FROM THE UNITED STATES DISTRICT COURT
              FOR THE DISTRICT OF MASSACHUSETTS

         [Hon. William G. Young, U.S. District Judge]
                                                    
                                         

                            Before
                    Boudin, Circuit Judge,
                                         

         Coffin and Campbell, Senior Circuit Judges.
                                                   
                                         

Martin D. Boudreau for appellant Aaron Stern.
                  
Lawrence Gordon on brief pro se.
               
Paul  G.  Levenson, Assistant  United States  Attorney, with  whom
                  
A. John  Pappalardo, United  States  Attorney, was  on  brief for  the
               
United States.

                                         

                       January 20, 1994
                                         

     BOUDIN,  Circuit Judge.    The  Miller  Act,  40  U.S.C.
                           

   270a-f  requires all  contractors  bidding for  government

construction   contracts  in  excess   of  $25,000   to  post

performance  and payment  bonds, and  the  Air Force  further

requires  that a  bid bond  accompany  the bid  itself.1   In

order to qualify for  consideration, contractors must  submit

bonds  issued  by  companies approved  by  the  United States

Treasury  and listed  in  Treasury  Department Circular  570,

commonly called the "T-list."  See  48 C.F.R.   28.202(a)(1).
                                  

The  bonds  must  also be  submitted  on  standard government

forms:   SF 24 (bid  bond), SF 25  (payment bond) and  SF 25A

(performance bond).

     Defendant  Lawrence  Gordon  was   the  head  of   Tower

Associates, Inc.,  a Winchester,  Massachusetts, construction

company   seeking  to  secure   a  contract  to   renovate  a

photography  laboratory at Hanscom Air Force Base in Bedford,

Massachusetts.  In September 1988 Tower submitted the low bid

for  the project,  offering to  perform  the renovations  for

$1,000,200.  This bid was accompanied by a bid bond issued by

Continental Surety Company, a surety or purported surety that

did  not appear  on the  T-list and  which apparently  had no

                    

     1"Bid  bonds"  ensure  that a  contractor  will  in fact
undertake the contract if its bid is accepted;   "performance
bonds"  guarantee  that  the  contractor  will  complete  the
project  in accordance with the specifications;  and "payment
bonds" ensure that those who  furnish labor and materials for
the project will be paid.

                             -2-

assets.   The Air  Force employee responsible  for overseeing

the  bidding process, Lorraine  McLoughlin, did not  at first

notice  this problem  and Tower was  awarded the  contract on

September 30, 1988.

     When   shortly   thereafter  McLoughlin   learned   that

Continental was not an approved issuer, she called Gordon and

informed him that Tower's payment and performance bonds would

have to  be written by  a T-listed  company.  On  October 17,

1988,  Gordon  presented  a  payment   and  performance  bond

purportedly  issued by Amwest Surety Insurance Co., a company

that did appear on  the T-list.  The bond bore  Tower's seal,

as well as the signatures of Gordon and one "Alan Stime," who

was  listed as  Amwest's  attorney-in-fact.    The  bond  was

accompanied  by a power of attorney, purportedly from Amwest,

also signed by "Alan Stime."

     The  Amwest bond and power of attorney were counterfeits

fabricated by  James  Grier, the  principal  of  Continental.

Grier later testified  at trial  that he  produced the  bogus

documents  at Gordon's  request.   Sandra  Catalano, a  Tower

employee, testified  at trial that  she was present  when the

bond was  signed by  Gordon  and defendant  Aaron Stern,  who

signed  the  bond as  "Alan  Stime."    At trial,  an  Amwest

official testified  that the bond  was not  a genuine  Amwest

bond  and  that  no "Alan  Stime"  was  or ever  had  been an

authorized attorney in fact for Amwest.

                             -3-

     The Air Force  rejected the phony bond  after McLoughlin

noted that some of  the signatures on the bond appeared to be

facsimiles  and that  the purported  Amwest  seal was  poorly

impressed and  illegible.   On October  19, 1988,  McLoughlin

requested that Tower resubmit its bonds and enclosed standard

government bond forms.   The Air Force received  a second set

of bonds, on the government  forms, from Tower on October 24,

1988.   These bonds were  also purportedly issued  by Amwest,

but the typed  name of the  attorney-in-fact under the  "Alan

Stime" signature was "Aaron Stern."  By this time, McLoughlin

had been  told by an  Amwest employee that Amwest  "had never

heard of Tower Associates."

     Rather than  accept the bonds, McLoughlin forwarded them

to the  Air Force Office  of Investigations and sent  Tower a

notice to cure.   On November  18, 1988, McLoughlin  notified

Gordon of her  communications with Amwest.   After requesting

an  extension  of  time  to  submit  new  bonds,  Tower  sent

McLoughlin  a  third  set  of  bonds on  December  13,  1988,

explaining that Tower  "[had been] given a bond  which proved

invalid."   This third  set of bonds,  like the  original bid

bond, was issued by Continental  and signed by Aaron Stern as

attorney-in-fact.   As Continental  was still  not on  the T-

list, McLoughlin rejected the bonds.

     The Air Force terminated Tower's award on March 3, 1989,

and eventually  awarded the contract  (without rebidding)  to

                             -4-

Fellsway,  Inc., which had  submitted the second  lowest bid.

On  June 13, 1991, Gordon and Stern  were charged in a multi-

count indictment with the following offenses:

     Count 1   Gordon  and  Stern   were  both  charged  with
               conspiring to defraud the United States in the
               solicitation  and  award of  the  construction
               contract at Hanscom Air Force  Base. 18 U.S.C.
                 371 (conspiracy to defraud).

     Count 2   Both    defendants    were     charged    with
               counterfeiting the  October 17,  1988, payment
               and  performance  bond purportedly  issued  by
               Amwest Surety  Insurance Company. 18  U.S.C.  
               494    (making,    uttering    or   presenting
               counterfeit bond).

     Count 3   Gordon was  charged with  knowingly presenting
               the same counterfeit bond to the Air Force. 18
               U.S.C.   494.

     Count 4   Gordon  and  Stern  were  both  charged   with
               uttering to  the Air Force a counterfeit power
               of attorney. 18 U.S.C.   495 (making, uttering
               or presenting counterfeit power of attorney).

     Count 5   Both  defendants   were  charged   with  false
               statements   in   completing   and  submitting
               Standard  Form  25,  the government  form  for
               performance bonds.   18  U.S.C.   1001  (false
               statement statute).

     Count 6   Both  defendants   were  charged   with  false
               statements   in   completing   and  submitting
               Standard  Form 25A,  the  government form  for
               payment bonds.  18 U.S.C.   1001.

     After a jury trial, Stern  was convicted on counts 1 and

4, and acquitted on count 2. Gordon was convicted on count 3,

and acquitted  on counts 1,  2 and 4.   Both  defendants were

convicted on Counts 5 and 6.  Gordon moved for a new trial on

June  19, 1992,  arguing  that  the  verdict  was  internally

inconsistent and  that the  government had  withheld material

                             -5-

exculpatory  evidence.  The district court denied this motion

on December 18, 1992.

     On  October 13, 1992, the district court sentenced Stern

to  a 60-day  term of  imprisonment, along  with a  period of

supervised release.   Gordon  was sentenced  on November  24,

1992, to  a 30-day  term of imprisonment  and nine  months of

home confinement.  Both defendants were also held jointly and

severally  liable  for  restitution.2    These   consolidated

appeals followed.  Stern's counsel has briefed and argued the

case; Gordon, with  this court's permission, has  relied upon

his district court filings in support of a new trial.

     In  this court  both  defendants  claim  that  the  jury

verdicts are internally  inconsistent.  Gordon argued  in the

district court that since he was acquitted (under count 2) of

counterfeiting the October  17 bond, it was  inconsistent for

the jury then to convict him  (under count 3) of uttering the

same counterfeit bond.  Stern  points to his own acquittal of

the charge of counterfeiting  the bond (again under  count 2)

and  protests that this acquittal undermines the jury verdict

convicting Stern (under  count 4) of uttering  a forged power

of attorney in support of the same bond.

                    

     2Stern's  sentence  was  stayed  pending  appeal.    The
district  court denied Gordon's motion  for a similar stay on
January  19,  1993, but  this  court  stayed the  payment  of
Gordon's restitution pending appeal on August 24, 1993.

                             -6-

     Both objections lack  merit.  As the  defendants purport

to recognize, general  jury verdicts may not  normally be set

aside for inconsistency as between counts.  United States  v.
                                                         

Powell,  469  U.S.   57,  64-65  (1984);  United   States  v.
                                                         

Bucuvalas, 909  F.2d 593, 597  (1st Cir. 1990).   The reasons
         

are explained by  Judge Friendly in United States v. Maybury,
                                                            

274  F.2d 899  (2d Cir.  1960),  and do  not need  repeating.

Maybury is relied on  by both defendants because the  appeals
       

court there did set aside  verdicts as inconsistent.  But the

inconsistent verdicts  were there  rendered by a  judge in  a
                                                       

jury-waived trial.   The whole point of Maybury  is that (for
                                               

both practical and historical reasons) the general verdict by

a jury  is a  special case but  a requirement  of consistency

does apply to written findings  made by a single judge.   Id.
                                                             

at 903.

     We  need not  discuss  other inconsistent-verdict  cases

cited  by defendants  because,  as it  happens,  there is  no

necessary inconsistency in the verdicts  in this case.  As to

Gordon,  there  was  evidence  from  Grier  that  he  (Grier)

fabricated the October 17, 1988, bond, but also evidence that

Gordon  knew it was counterfeit and nevertheless presented it

to the Air Force.  The jury may have supposed (quite wrongly)

that Grier's admission entirely lifted responsibility for the

counterfeiting from Gordon's  shoulders but also  permissibly

                             -7-

believed  that  Gordon uttered  the  bond  knowing  it to  be

forged.3

     Similarly,  the  acquittal  of Stern  on  the  charge of

counterfeiting the same bond, again quite possibly because of

Grier's admission,  is in  no way  inconsistent with  Stern's

conviction for uttering  to the Air Force the companion power

of attorney document knowing it to be forged.  In addition to

other  evidence to support the uttering conviction, there was

direct  testimony  from Sandra  Catalano  that  Stern himself

signed the bond using the phony signature "Alan Stime."  

     Whether or  not Stern,  Gordon or  both could  have been

convicted of procuring or participating in the counterfeiting

of the bond itself is irrelevant.  It is sufficient to dispel

the taint of inconsistency that a rational jury  could easily

have acquitted on count 2  while convicting Gordon on count 3

and  Stern on  count 4.   And,  as explained  at the  outset,

inconsistency  would   not   in  any   event  undermine   the

convictions  so  long as  they themselves  were, as  they are

here, supported by sufficient evidence.  See Powell, 469 U.S.
                                                   

at 67.

                    

     3Gordon's  claim that  the  conspiracy acquittal  (under
count  1) is inconsistent with the uttering conviction (under
count 3)  is even more  far-fetched.  True, the  uttering was
charged as an  act in furtherance  of the conspiracy.   But a
literal  minded jury might  believe that the  uttering itself
was   proved  amply  but  that  the  "agreement"  element  of
conspiracy had not been established.

                             -8-

     Next,  Gordon claimed  in the  district  court that  the

government violated its obligation, under  Brady v. Maryland,
                                                            

373  U.S. 83  (1963),  to  produce  exculpatory  evidence  by

failing to turn over the  grand jury testimony of Grier, whom

Stern called as  a witness.  The background is  this:  Grier,

called by Stern as a defense witness, was then cross-examined

by Gordon's counsel--not by the  government.  On this  cross-

examination, Grier proceeded to testify that Gordon had asked

Grier to  forge the October  17, 1988 bond.   Although Gordon

was acquitted of  that forgery, he was convicted  of uttering

the  forged  bond,  and  the  Grier  testimony--elicited   by

Gordon's own  counsel--may have  helped  to confirm  Gordon's

knowledge of the forgery.

     After conviction  Gordon learned that  Grier, testifying

in  the grand  jury prior  to trial,  had himself  denied any

knowledge  of  the bond.    Gordon  moved  for a  new  trial,

contending that the government's failure to produce the grand

jury testimony at  trial as impeaching evidence  violated its

obligation under  Brady.   In pre-trial  requests Gordon  had
                       

asked in general  terms for Brady material, but  he had never
                                 

specifically  requested  production  of  prior statements  or

testimony by Grier.  The  district court denied the new trial

motion, citing United States v. Pandozzi, 878 F.2d  1526 (1st
                                        

Cir. 1989), and United States v. Carrasquillo-Plaza, 873 F.2d
                                                   

10 (1st Cir. 1989).

                             -9-

     Under the Jencks  Act, 18 U.S.C.   3500,  the government

is required to produce prior statements by its own witnesses,

whether or  not the  statements are exculpatory.   And,  if a

statement is  itself exculpatory, the  government under Brady
                                                             

is normally required to produce it, regardless of  whether it

is made by a trial witness. See Brady, 373 U.S. at 86.  Here,
                                     

says the government, Grier's grand  jury testimony was not  a

prior  statement  by   a  government  witness,  nor   was  it

exculpatory in the sense that it disproved Gordon's guilt.   

     Thus, in the government's view, the grand jury testimony

is  merely newly discovered  impeaching evidence.   Under the

Wright-Martin  standard  for  a  new  trial  based  on  newly
             

discovered  evidence, the ordinary requisites for a new trial

on this ground  are specific and demanding.4   Gordon may not

have met any of the requisites, and he certainly did not meet
            

the requirement  that the  newly discovered  evidence be  (at

least  in the  normal case)  "not merely  . .  . impeaching."

Martin, 815 F.2d at 824 (quoting Wright, 625 F.2d at 1019).
                                       

                    

     4A  new trial will ordinarily be denied absent a showing
that
     (1)  the evidence was unknown or unavailable to the
     defendant at the time of the trial;  (2) failure to
     learn  of the  evidence  was  not  due to  lack  of
     diligence  by the defendant;   (3) the  evidence is
     material, and not  merely cumulative or impeaching;
     and (4)  it will  probably result  in an  acquittal
     upon retrial of the defendant.

United States v. Martin, 815  F.2d 818, 824 (1st Cir.), cert.
                                                             
denied, 484 U.S. 825 (1987) (quoting United States v. Wright,
                                                            
625 F.2d 1017, 1019 (1st Cir. 1980)).

                             -10-

     Thus Gordon's only hope is  to argue that the grand jury

testimony did have to be produced under Brady in which event,
                                             

as  the government notes, the Wright-Martin standard does not
                                           

invariably apply. See United States v. Sanchez, 917 F.2d 607,
                                              

617  (1st Cir.  1990),  cert. denied,  499  U.S. 977  (1991).
                                    

Rather,  there is a general obligation to produce exculpatory

testimony and failures to comply are reviewed  after the fact

under the standard  of United States v. Bagley,  473 U.S. 667
                                              

(1985).  Bagley  is somewhat  opaque, there  being no  single
               

majority opinion, but  reversal may be warranted  where there

is a  "reasonable probability" that  the undisclosed evidence

would havealtered the outcome. Id. at 682(plurality opinion).
                                  

     Here the grand jury testimony was not exculpatory in the

sense  that, reading  the  bare  language  before  trial,  an

assistant U.S.  attorney would  think it  helpful to  Gordon.

After  all, in the  testimony Grier  denied knowledge  of the

forgery, a  position that could  be neutral in its  impact on

Gordon or  even potentially  harmful to  Gordon (in  shifting

responsibility  to someone  other than  Grier).   Only  after

Grier, as  a defense witness  for Stern, named Gordon  as the

procurer of the forgery did  the grand jury testimony take on

a potential as impeaching evidence.

     The  government  protests   that  it   has  no   ongoing

obligation  to monitor the testimony of defense witnesses and

to  seek out prior  statements in its  files that  may in the

                             -11-

course of  trial  turn out  to  have impeachment  value  when

defense testimony injures  a defendant.  Even if  it did have

such an obligation in some instances, there would be  serious

questions--not  easily answered  on  this record--whether  in

this   case  Gordon's  own   access  to  Grier   negated  the

obligation, see United States v.  Hicks, 848 F.2d 1, 3-4 (1st
                                       

Cir. 1988), and whether the  failure of Gordon to request the

grand jury testimony  is also fatal to the Brady  claim.  Cf.
                                                            

18  U.S.C.    3500(b) (request  by  defendant required  under

Jencks Act); Carrasquillo-Plaza,  873 F.2d at 13  (failure to
                               

make a specific request for alibi witness statements).

     We think that these interesting questions had best await

another  occasion.   It  is  enough  in  this case  that  the

impeaching  evidence, even if made available to Gordon, could

not  conceivably have  altered the  outcome.   See  generally
                                                             

Pandozzi, 878 F.2d at 1528-30.   The jury acquitted Gordon on
                                                   

the counterfeiting  count despite Grier's  direct inculpation

of Gordon; and the  knowledge element of the  uttering count,

on  which Gordon was  convicted, was confirmed  by the direct

testimony of another witness, Catalano,  as well as much else

in Gordon's conduct.   Under Bagley, the  impeaching evidence
                                   

does  not remotely "undermine confidence" in the outcome. 473

U.S. at 682.

     The final issue in this  case is the most perplexing and

relates  solely   to  sentencing.     Under  the   Sentencing

                             -12-

Guidelines,5 the amount  of "the loss" is a  specific offense

characteristic of crimes  involving fraud or deceit,  and the

base  offense level  (6 levels) is  increased by  a specified

number of levels  (from 0 to 11  additional levels) depending

on the  amount of the  loss.  U.S.S.G.    2F1.1 (1988).   The

adjusted  offense  level,  together  with  criminal  history,

determines the sentencing range, and actual loss  may also be

the basis for a restitution order. 18 U.S.C.   3663(b)(1).

     In  this  case, following  the pre-sentence  report, the

district court found  that the loss to  the Air Force  of the

fraudulent  activities  in  this  case  was  "the  difference

between the bid price [by  Tower] and the award [to Fellsway,

the  second  lowest  bidder] for  $88,477,  increased  by the

restated administrative costs of $250" involved in reawarding

the contract  to Fellsway.   The  resulting figure,  $88,727,

increased the  base offense  level from 6  to 11,  U.S.S.G.  

2F1.1(b)(1) (1988), and  this in turn was increased  to 13 by

                    

     5The   pre-sentence   report   referred   to  the   1988
guidelines,  which  were   in  effect  when  the   crime  was
committed.    Current  practice  would  normally  invoke  the
guidelines  in effect  at the  time  of sentencing--the  1991
version  for Stern and  the 1992 version  for Gordon--barring
any ex post facto problems.  See Isabel v. United States, 980
                                                        
F.2d 60, 62  (1st Cir. 1992).   But since  the 1991 and  1992
guidelines employ a  new loss/increase- in-level  table which
would have resulted  in a higher base offense  level for both
Stern and Gordon than provided for under the 1988 guidelines,
we  cite  to  the  1988   version.    See  United  States  v.
                                                         
Harotunian, 920 F.2d 1040, 1042 (1st Cir. 1990).
          

                             -13-

the  addition  of two  more  levels  for  "more than  minimal

planning."  Id.   2F1.1(b)(2).
               

     The loss attributed to Stern may well have had no effect

on his sentence  of confinement; a downward  departure, based

on assistance to  the government, reduced his  confinement to

below the minimum range that  would have prevailed if no loss
                                                        

had  been   attributed  to   him.     Gordon's  sentence   of

confinement, also  based on  a downward  departure, might  or

might  not  have  been  affected  by  a  lower  loss  figure,

depending on  how small  a loss was  imputed.6  But  based on

the imputed loss of $88,727,  both defendants were ordered to

pay  restitution--Stern to pay $88,727 and Gordon $80,000--so

the importance of the loss figure is obvious.

     At this  point, some procedural  history is needed.   In

the district  court, both  defendants challenged  the $88,727

loss figure on somewhat different grounds.  Then, while these

appeals were pending, someone apparently happened  upon Judge

Posner's decision in United States v. Schneider, 930 F.2d 555
                                               

(7th Cir. 1991), which undoubtedly made the government uneasy

about the  loss calculation in this case.   In any event, the

government and  defendants entered into a  joint stipulation,

                    

     6Gordon's departure was based on the theory that the Air
Force could  have rebid the  entire contract  for $10,000  (a
figure supplied by the Air Force), instead of merely awarding
it  to the previous second lowest bidder.  Cf.  United States
                                                             
v.  Gregorio, 956  F.2d 341,  344-48  (1st Cir.  1992).   The
            
government did not appeal this departure.

                             -14-

proposing  that this court  remand the case,  before deciding

the merits, for  resentencing in light of  Schneider; and the
                                                    

parties stipulated further that

     1.   The parties  jointly stipulate  that the  best
     readily  calculable measure  of the  loss from  the
     offenses of  conviction, for  purposes of  applying
     the  Sentencing  Guidelines,  is  $ 20,450.    This
     amount  includes both an attempted gain of $ 20,200
     (the purchase price for a  genuine bond of the kind
     that  was   forged  in   this  case),   and  actual
     consequential  losses  of  $  250 (the  immediately
     identifiable administrative  costs associated  with
     the  re-awarding  the   Photolab  contract).    For
     purposes of ordering  restitution, only the  actual
     loss figure, $ 250 is subject to restitution.

     2.  The United States further reserves the right to
     argue    that    the    stipulated    amount--while
     representing   the   best   readily   ascertainable
     estimate of  loss--understates the  full extent  of
     the  loss in question.   The United  states further
     reserves the right  to argue that, given  the small
     sum of restitution payable, fines should be imposed
     upon each  defendant, in an  amount to be  fixed in
     light of the defendants' resources.

     This court denied  the motion to remand,  believing that

the challenges to the convictions ought to be decided  before

any remand for fine-tuning the  sentences.  Stern, taking the

view  that the  stipulation  was binding  only if  this court

ordered an immediate remand, has  argued in his brief in this

court that no  loss, apart perhaps from the  $250 involved in
             

shifting the  award to the  second bidder, has been  shown by

the government.  The government  adheres to its request for a

remand in accordance with the stipulation, arguing that Stern

has waived  the contention  he now makes.   Gordon  has urged

nothing beyond the stipulation.

                             -15-

     It would  be a  hazardous venture to  lay down  abstract

rules  as  to  how  "loss"  is to  be  calculated  under  the

governing guideline even if the focus were narrowed to  false

statements in bid  documents.  As Judge Posner  made clear in

Schneider, the  underlying  facts  of  individual  cases  may
         

differ  widely, and even in comparable situations, what proof

is available as to specific items of loss will vary from case

to case. See 930 F.2d at  557-59.  Further, we note that  the
            

deceptively simple notion  of "loss" is elaborated  under the

guideline  to include situations  of foreseeable  or intended

losses, see U.S.S.G.   2F1.1,  application note 7 (1988), and
           

in later  versions to cover various specific  types of fraud,

e.g.,  id.,  application  note 7(e)  (1993)  (Davis-Bacon Act
          

fraud).

     If  we   agreed  with  the  district   court's  original

calculations of loss, we would not remand the case regardless

of the stipulation of  the parties, since the parties  cannot

by agreement create error where none exists.  On this record,

however, we  think that  there is no  basis for  mechanically

measuring the  loss as the  difference between the  two bids.

The problem is that the government never showed that it could

have secured a  bid from a properly bonded  contractor at the

price offered by Tower.  Without such evidence, it is hard to

see how  the government  can measure its  loss on  the theory

                             -16-

that, but for  the fraud, it would have  enjoyed that initial

low price.7

     On certain facts--say,  a general increase in  the level

of  second  round bids  after  a  rebidding due  to  fraud--a

calculation  of  loss  based on  the  differential  between a

tainted first-round best  bid and a higher  second-round best

bid  might be entirely  persuasive.  But  here the government

simply  took  the   second  best  first-round  bid   with  no

rebidding; and its administrative costs in shifting the award

from Tower to  Fellsway were admittedly minimal ($250).   The

probation  reports and the  government urged the  loss figure

adopted  by  the  district judge,  and  the  defendants while

protesting did  little to undermine  it.  Yet  the government

itself no longer supports the $88,275 figure, and we can find

no basis to sustain it on the present record.

     Conversely, we reject Stern's "no loss at all" argument,

at least so  far as concerns the guideline  calculation.  The

section  2F1.1 guideline  commentary,  from the  1988 version

(application note 7)  to the present 1993 version  (id.), has
                                                       

included  the  "probable"  or "intended"  or  "expected" loss

                    

     7It is true that if the Amwest bond had been a real bond
instead of a forgery, then  the government would have enjoyed
the original  low price;  and in this  sense the  forgery may
seem like the cause of that  loss.  But there is no  evidence
    
that Tower Associates could ever  have secured a real bond by
a T-list surety or, if it could, that its bid would have been
as low.  Indeed, Continental  seems to have been an off-shore
"front" for contractors who could not get T-list bonding.

                             -17-

threatened by a defendant's conduct as an alternative measure
                                                     

of  loss if that figure can be  determined and is larger than

actual loss.  The evident purpose of the alternative is to be

certain  that attempted fraud does not escape all adjustments

based  on magnitude merely because the  fraud miscarried.  We

think that  this is  just such a  case where  the foreseeable

loss exceeded the actual loss.

     It was plainly foreseeable at the time of the fraud that

the Air Force might be deceived by the phony Amwest  bond and

might finally award the contract to Tower.  At that point, it

is  hard  to know  the precise  risk of  loss imposed  on the

government,   for  it  would  depend  on  many  circumstances

including the likelihood that Tower would flawlessly complete

the contract.  Yet "the amount of loss  need not be precise,"

U.S.S.G.    2F1.1, application  note 7  (1988); and,  broadly

speaking, to inflict  a phony  construction-contract bond  on

the government  exposes the government to the average cost of
                                                     

failure to perform the contract adjusted  by the average risk
                                                        

of failure to  perform.  That adjusted figure  should also be

the approximate price of the average bond for such a project.

Of  course, the  pertinent  figure  could  be higher  if  the

government  sought  to  prove  that  Tower  was  a  high-risk

contractor and would have been charged more for a valid bond.

                             -18-

     To assume that the phony bond might well be accepted is,

in  a  case  like  this  one,  entirely  fair.    It  is  the

defendants' intended outcome and, given possible carelessness

by administrators or merely a  good forgery, it is normally a

realistic likelihood.  From the standpoint of the guideline's

"intended or probable  loss" criterion, we see  nothing wrong

with the use of the cost of  a valid bond as a fair proxy for

the potential loss  caused by the uttering of  the phony bond

and forged  power of attorney.   In this case,  the potential

was not  realized, but  it was still  intended or  reasonably

likely and thus a proper measure of loss under the guideline.

     Consequently, we think that the principle underlying the

first paragraph  of the  quoted stipulation  is a  legitimate

basis in this case for calculating loss under  the guideline;

whether the  $20,200 figure is  binding on Stern is  a matter

that can be resolved on remand if Stern seeks to disclaim the

stipulation.8  Of course,  the government did not offer  such

evidence  of bond cost in the original sentencing proceeding;

but   where  a   sentence  is   vacated   and  remanded   for

redetermination under  correct principles, the  government is

not automatically foreclosed from offering evidence pertinent

                    

     8The   district  court  is  not  required  to  accept  a
stipulation on an issue of fact  pertinent to sentencing, but
is free  to do  so given the  apparent reasonableness  of the
proposed  figure.  This assumes, of course, either that Stern
withdraws his disclaimer (as he  would plainly be wise to do)
or  that  the   district  court  decides  that   his  initial
acceptance of the stipulation is binding in any event.

                             -19-

to the newly announced rule.  See United States v. Sepulveda,
                                                            

1993 U.S.  App. LEXIS  33020, *107 n.31  (1st Cir.,  Dec. 20,

1993).

     Restitution is  a different matter.   We agree  with the

government's  concession that  the intended or  probable loss

cannot be  the measure of  restitution:  it  is one  thing to

base a criminal sentence on the magnitude  of threatened harm

but quite another to  "restore" to the government money  that

it  never  lost.   Here,  the actual  loss  is only  the $250

administrative  cost of reawarding  the contract.   Given the

common interrelationship  between fines  and restitution,  we

see no  reason why  the government should  not be  allowed to

argue for a fine on remand.

     Accordingly,  the judgment of conviction in each case is

affirmed,  and the sentence and  the orders of restitution in
        

each  case  are  vacated  and  the  cases  are  remanded  for
                                                        

resentencing  in  accordance  with  this  opinion.    Further

proceedings on remand are for the district court to determine

in the first instance.

     It is so ordered.
                     

                             -20-
