Should you set GMP at Schematic Design?
Should you set your Guaranteed Maximum Price (GMP) at schematic design? No, you should not set it at schematic design. Should you set your guaranteed maximum price (GMP) at construction documents? Let’s discuss this further. The GMP on a project is the point where you ask your contractor to lock in the costs for the project and, in theory, transfer the risk to them. And although we agree that locking in a price does shift some exposure to the contractor, a sophisticated contractor will manage that risk through allowances, contingencies and exclusions and clarifications/qualifications. Here are some pros and cons. Construction Document GMP: At this point, the drawings are nearly complete and the contractor will have all the information to receive multiple bids and clearly understand the intent of the design. The costs will be detailed and based on actual take-offs and material pricing. Pros You are receiving