A project manager discovers that a subcontractor has been disposing of chemical waste improperly, violating environmental regulations. The project is 85% complete and on the critical path. Replacing the subcontractor will cause a 2-month delay and a 20% budget overrun.<br/><br/>What is the BEST course of action for the project manager?

Answer options:

Allow the subcontractor to finish the remaining 15% of work under strict supervision to avoid project failure.

Report the violation to the project sponsor and ask for guidance on whether to suspend the subcontractor.

Suspend the subcontractor's work immediately and initiate a root cause analysis and remediation plan.

Issue a formal warning to the subcontractor and deduct the cost of potential fines from their final payment.

How to approach this question

When facing legal/regulatory violations, the answer is always to stop the violation immediately. Schedule and cost impacts are secondary.

Full Answer

C.Suspend the subcontractor's work immediately and initiate a root cause analysis and remediation plan.✓ Correct

Compliance with legal and regulatory requirements is non-negotiable. The PM must stop the non-compliant activity immediately (Suspend work). Continuing the work (A) or just warning (D) exposes the organization to massive liability and violates ethical standards. Reporting (B) is part of the process, but the immediate action is to stop the violation.

Common mistakes

Prioritizing the project schedule (A) over legal compliance.

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