How to deal with a lazy class?
First things first: what did your syllabus say, and what did you say when you assigned the project?  If the assignment was a part of the final grade, and getting a zero on the project means that all the students will fail, and they knew this when the class began and when the project was assigned, and the project was assigned with enough time for them to produce an adequate result, then no one should complain when you fail them (or at least no one should have a legitimate reason to complain).  I have a feeling that if this is not a hypothetical case, there is more to the story.

I have been guilty of deviating from the syllabus in various ways over the years, but the students knew the ramifications of that deviation, and I was always fair in my grading because of it.  I find it hard to believe that an entire class skipped an assignment that guaranteed they will fail, unless of course it guaranteed they all receive an A.

I think you need to provide more information for a better answer, but the bottom line is that if the students failed the class legitimately, then fail them.  Just make sure you've got the means to back up your reasoning for those failures if it is indeed the entire class.