I am quite certain that they face heavy fines for missing a deadline.NO you don't! It could very easily be the other way around.
"You are bidding on a project that will begin on --. It will end on --.
Your early completion bonus is $$. Your penalty deduction per day late is $$. If the deduction reaches the maximum of 7 days late, you will be on probation for future public works projects."
It's that simple. That's the way all business works that doesn't involve bureaucracies and unions.