During a safety inspection, regulators determine your construction project violates several statutes and issue an immediate USD 250,000 fine, exceeding the project's management reserve. Considering typical immediate impacts, which potential consequence of this non-compliance will most severely threaten the project budget?
An immediate regulatory fine of USD 250,000
Rebuilding two non-compliant work packages estimated at USD 50,000
A potential long-term decline in the company's brand reputation
Daily toolbox safety meetings for the remainder of the project
The regulatory fine removes a large sum of cash from the project at once and is payable before work can proceed, directly eroding the cost baseline and any remaining reserves. Although rebuilding two deliverables and holding frequent safety meetings add cost, those expenses can be scheduled and managed over time. Potential brand-image damage is significant but its financial effects are indirect and usually occur after the project closes. Therefore, the immediate fine represents the greatest threat to the project budget.
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