Super AC Subcontractor was awarded their biggest subcontract
ever: $3 million.
All they had to do before starting was to obtain a payment bond
and a performance bond for the full amount of its subcontract. This
was a requirement, so they did it. After they got the required
bonds, they signed the subcontract and couldn't wait to get to
work.
The project went great at first, but eventually, Super AC
Subcontractor realized that it could not complete the project for
the subcontract price. After Super AC Subcontractor reviewed the
scope of work agreed to in the subcontract, it turned out they were
about $250,000 short in the subcontract price because they missed
something in the bid. Super AC Subcontractor took a hard look at
their finances and searched for ways they could use the money they
had to finish the project, even though the project would be a huge
loss. After a careful review of their books, Super AC Subcontractor
determined that finishing the project would
