(1) Where a contractor fails to complete or comply with the requirements of a Fund Project contract, the Commission may require:
(a) the contractor to compensate it up to the amount of funds paid, plus any administrative and legal costs incurred; or
(b) the contractor to, where a contract bond was given by the contractor to secure the repayment of sums advanced by the Commission to execute a Fund Project:
(i) pay or satisfy any claim or entitlement to payment of damages, compensation or other financial relief, or
(ii) pay or satisfy such claim or entitlement up to the Bond Amount or at the Commission's option to perform or execute the contract or any other contractual obligation relating to the Fund Project.
(2) The Commission shall not require compensation under sub-regulation (1) until dispute resolution provisions under the contract have been exhausted.