Construction Glossary
Guaranteed Maximum Price (GMP)
The GMP contract is the highest or maximum price you agree to with your contractor to build your projects according to specs and drawings.
What Is Guaranteed Maximum Price (GMP)?
A Guaranteed Maximum Price (GMP) is a contractual agreement where the contractor guarantees that the total project cost will not exceed a specified maximum amount. This arrangement provides cost certainty for the client while allowing the contractor to manage the project within the agreed budget. The GMP typically includes a detailed estimate of costs and provisions for handling changes or unforeseen conditions.
Example
Contract guaranteeing the project won’t exceed a set price.