Construction · Defined
Guaranteed maximum price (GMP)
A contract pricing arrangement establishing a maximum payable amount for defined work, subject to the agreement’s adjustments and exclusions.
Why it matters
A GMP is not an assurance that every development cost is covered. Check allowances, contingencies, assumptions, owner-direct work, and permitted changes before treating it as a complete project budget.
In practice
A project example
The GMP excludes utility company charges that remain in the owner’s development budget.
General educational guidance from KOW Building Consultants. Examples are illustrative, not project records. The applicable contract, standard, program, and jurisdiction control the requirements for a specific assignment.