In a construction management context, what does "GMP" stand for?

In a construction management context, "GMP" stands for Guaranteed Maximum Price. This is a crucial contract type, particularly in construction projects, as it establishes a ceiling on the total amount that the owner will pay for a project. Under a GMP agreement, the contractor agrees to complete the project for a price that will not exceed a specified maximum limit, thus providing a level of financial security to the owner.

The significance of the Guaranteed Maximum Price lies in its ability to balance risk between the owner and the contractor. If the project ends up costing less than the GMP, the contractor might benefit from some savings, but if it exceeds the GMP, the contractor generally absorbs the costs beyond that maximum. This arrangement encourages the contractor to manage costs effectively while also giving the owner the confidence that their budget will not be exceeded, which can be essential for financial planning and project viability.

In comparison to the other potential options, the terms provided do not accurately reflect the established terminology within the construction industry. For instance, General Management Price, General Maximum Price, and Guaranteed Management Pricing are not recognized terms that convey the same meaning or contractual implications as Guaranteed Maximum Price.