We signed a contract for a project in which we realized the project was quoted incorrectly. Can we break the contract and what penalties are involved?

It is possible to rescind a contract under circumstances where there is an obvious unilateral mistake, but it is highly dependent on the facts and the nature of the contract (e.g., public work or private work).  For example, if you bid $1900.00 on a job that was supposed to be bid at $190000 instead, the misplaced decimal point would likely be sufficient to put the other side on notice of the mistake, especially if there were competitive bids in the correct range.  As the complexity of the project and its value go up, however, it is a harder case to make.  You really need to see a construction attorney to go through the specifics of the contract and the bidding process to get a solid answer.