ABC Corporation has recently given out a nine month contract to a construction subcontractor. At the end of the first month, it becomes obvious that the subcontracting is not reporting costs according to an appropriate WBS level. ABC Corporation asks the subcontractor to change its cost reporting procedures. The subcontractor states that this can’t be done without additional funding. This problem has occurred with other subcontractors as well. What can ABC Corporation do about this?
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Explanation:
They must improve the quality of raw material.
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