Name: Sarah Thompson
City: Los Angeles, CA
"Wow, I couldn't believe my luck when I stumbled upon this website while searching for what GMP stands for in construction! As someone new to the industry, I was often left scratching my head at all the acronyms and technical jargon. But this site not only provided a clear and concise definition of GMP, but it also gave me a comprehensive understanding of its importance in construction projects. The way they explained it was so simple, it made me feel like a construction expert in no time! Thank you for demystifying the world of construction acronyms!"
Name: John Anderson
City: New York City, NY
"I've been working in the construction industry for over a decade, and even I had moments where I wondered what GMP stands for in construction. That's when I found this fantastic website! Not only did it give me a straightforward definition of GMP, but it also provided real-life examples and case studies that highlighted its significance in the construction world. I was blown away by the depth of information and the user-friendly interface. It's a fantastic resource for industry professionals and beginners
What does GMP mean in the construction industry?
The guaranteed maximum price
What does GMP stand for in construction? GMP stands for the guaranteed maximum price. That refers to the highest amount of labor, materials and profit costs the contractor can charge the customer in the construction industry.
What are the benefits of GMP in construction?
A Guaranteed Maximum Price (GMP) contract offers several benefits to both owners and contractors in construction projects. It ensures cost control, allowing owners to plan and budget effectively while incentivizing contractors to optimize resources and minimize expenses.
What is the difference between GMP and lump sum construction?
A lump-sum contract is when the price will be for a set amount regardless of what the contractor's actual costs may be. In contrast, with a GMP contract, the owner pays the contractor's actual costs plus the profit. The project costs are capped at the price maximum.
What is the difference between fixed price and GMP?
A GMP contract differs from a fixed-price contract, such as a lump sum contract, in that, for the latter, the price remains the same no matter how much a contractor spends to complete the project. GMP contracts are more flexible—the property owner will reimburse the contractor for expenses up to the maximum.
What are the disadvantages of GMP contracts?
- A GMP requires the owner to be savvy about the construction process and have the time to manage the paperwork, billing, etc.
- There is a potential for a contractor to submit an inflated GMP and then use low-skill labor and/or low-quality materials to increase savings/profits.