The document discusses the Cost of Nonconformance as it relates to Cost of Quality. The Cost of Nonconformance is the cost incurred from failures when quality expectations are not met, such as fixing or reworking a product or service that does not meet standards. There are internal costs like rework time and money within the project scope, as well as external costs after delivery like warranty fulfillment, liability costs, and lost business from failures. Understanding and accounting for the Cost of Nonconformance is important for project management.