Guaranteed Maximum Price (GMP)
A GMP is a contracting arrangement in which an owner engages an entity to perform a defined scope of work for a price that is guaranteed not to exceed a stated maximum, often including allowances and contingencies. CMAA guidance describes GMP contracting as a not-to-exceed maximum price arrangement, and federal contracting regulations similarly describe GMP as a ceiling price subject to adjustment under changes and related clauses.
- Where it applies
- General / Federal (definitions exist in public contracting contexts)
- When it comes up
- Contracting; construction cost control
- Property types
- All; especially CM@Risk and alternative delivery
In practice
GMP execution is governed by definition: what is inside "Cost of the Work," who controls contingencies, and what triggers GMP adjustments.
Related terms
Construction Terminology
- Change Order
- Construction Management at Risk (CMAR / CM@Risk)
- Design-Bid-Build
- Design-Build
- Hard Costs
- Lump Sum
- Punch List
- Shop Drawings
- Soft Costs
- Submittals
General information, not legal, tax or financial advice.