You are leading a construction project that is 65% complete when a key subcontractor declares bankruptcy. This subcontractor was responsible for all electrical work, representing 20% of remaining project activities. Three alternative subcontractors have been identified: Vendor A can start immediately but costs 35% more; Vendor B matches the original cost but needs 45 days mobilization; Vendor C costs 15% more and needs 20 days mobilization. The electrical work is on the critical path, and contract penalties of $50,000 per week apply after the baseline completion date, which is 90 days away. Your analysis shows current electrical work would take 70 days. What is the BEST course of action?

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Accepted Answer

The correct answer is D. This is a complex decision requiring quantitative analysis because multiple variables interact: vendor costs, mobilization delays, critical path impact, and contract penalties. With 90 days until penalties and 70 days of electrical work needed, any delay could trigger significant penalties ($50K/week). The project manager must calculate total project cost for each scenario: vendor premium + penalty costs + potential mitigation costs. Option A is the main distractor because it appears to balance cost and schedule, but selecting any vendor without quantitative analysis is premature. For example, Vendor A's 35% premium might still be cheaper than Vendor C's cost plus penalties if the 20-day delay cannot be fully mitigated. Professional project managers use data-driven decision making, especially for high-stakes procurement decisions on the critical path.

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