Guaranteed Maximum Price (GMP) Contract

Guaranteed Maximum Price (GMP) Contract

A contract where the contractor agrees to complete the project without exceeding a set maximum price.

55,312.56

(3 customer reviews)

Description

A Guaranteed Maximum Price (GMP) Contract protects the project owner by capping the maximum cost of construction. If actual costs are lower, savings may be shared between the contractor and owner. The contractor bears the financial risk of overruns beyond the agreed cap. The contract includes detailed cost breakdowns, contingency funds, and incentives for cost-saving measures. GMP contracts are ideal for large-scale projects where cost control is crucial. They balance flexibility and financial predictability, making them attractive for public infrastructure and commercial developments.