Provides a â€œsafetyâ€ net to the Owner from the contractor who guarantees that the construction cost will not exceed a certain amount. The GMP may be agreed upon after the Design Development Phase or after Bidding & Negotiations.
A form of contract in which compensation may vary according to the amount of work involved but in any case not more than an agreed total amount. [D02815] RMW
A cost for construction that is guaranteed by the construction manager at risk, based on the design documents and other information at the time the owner and construction manager at risk agree on the GMP. Depending upon more detailed development of the design documents and owner change orders, the GMP may increase.
An amount stipulated in a construction contract as the maximum sum payable by the owner to the contractor for the work specified.
A Guaranteed Maximum Price (also known as GMP, Not-To-Exceed Price, NTE, or NTX) contract is a cost-type contract (also known as an open-book contract) where the contractor is compensated for actual costs incurred plus a fixed fee subject to a ceiling price. The contractor is responsible for cost overruns, unless the GMP has been increased via formal change order (only as a result of additional scope from the client, NOT price overruns, errors, or omissions). Savings resulting from cost underruns are returned to the owner.