Does requiring a GMP during preconstruction phases create a potential conflict between the CM and the Owner?

Requiring a Guaranteed Maximum Price (GMP) during preconstruction phases is primarily intended to facilitate alignment between the Construction Manager (CM) and the Owner. By establishing a GMP early on, both parties can agree on a maximum expenditure for the project. This clarity helps ensure that the Owner can budget appropriately for the project while the CM commits to managing the project within that financial limit.

Having a GMP encourages collaboration rather than conflict, as the CM takes on the responsibility to manage costs effectively while still meeting the project requirements. This can lead to a stronger partnership where both parties work together to identify opportunities for cost savings and project efficiencies, thus enhancing the overall success of the project. A GMP can also help mitigate the risks associated with project cost overruns, fostering trust between the CM and the Owner.

The other options suggest conflict or limitations to certain arrangements, but they do not recognize that the GMP is fundamentally designed to align interests, thereby reducing conflicts rather than creating them. By setting a maximum price, the focus shifts to delivering the project within that established budget while maintaining quality and performance, enhancing the collaborative environment necessary for successful project delivery.