Guaranteed Maximum Price (GMP) Contracts in Florida
A GMP contract caps the construction cost at a maximum price. The contractor absorbs overages; savings may be shared. Common for large Florida commercial, institutional, and government projects requiring cost certainty with design flexibility.
How It Works
- Contractor selected (often qualification-based)
- Pre-construction services (estimating, value engineering)
- GMP set at 50-75% design completion
- Contingency included for unforeseen conditions
- Open-book accounting tracks actual costs
- Savings shared per contract terms
Risks
- Owner: GMP set too high from incomplete documents
- Contractor: Unforeseen conditions exceed estimates
- Both: Scope vs. change order disputes (most common litigation)
Related Terms
- Contract — Construction agreements
- Equity — Project cost management
- Encumbrance — Construction liens
Barnes Walker Construction Law
Barnes Walker's attorneys draft and negotiate GMP contracts for Florida construction projects. Request a legal inquiry for assistance.
Reviewed by the attorneys at Barnes Walker, Goethe, Shea & Robinson, PLLC