The contractor of the ABIG Construction Company is reviewing plans for the megaproject on which he is working and discovers that the specification was underestimated for the amount of support needed for the project’s cable-stayed bridge. In this type of bridge, the roadway is supported by cables attached directly to the supporting tower (or towers) of the bridge. He estimates that he will have to spend more money and time to shore up additional support for the bridge since it is a fixed-price contract. The contractor estimates that the additional cost could be in the $500,000 range for a $3 million contract. If he builds the bridge in accordance with the specifications, he will have satisfied the requirements of the contract and will be paid in full. 

1. What, if any, are the risks, insurance issues, and the legal and ethical factors that the contractor faces?

2. What would you advise the contractor to do, and why? Assume you are the risk manager on the project and you learn about the contractor’s dilemma from one of your project managers. Your boss tells you this is a construction matter and it is not a problem that risk management should resolve.

3. What would you do, as the risk manager, to address this problem?

4. What are your ethical responsibilities?