Guaranteed maximum price (construction industry)

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The Guaranteed Maximum Price (GMP) is a construction contract model . It is based on the flat-rate contract model . As with this, the service target to be provided by the general contractor is agreed. The price to be paid by the client for the entire project, however, is not a fixed price , but a maximum price . Savings - in particular from subcontracting services that can be awarded more cheaply than estimated - share the client and the contractoraccording to a predetermined key. The prerequisite for successful GMP projects is early, cooperative cooperation between the construction company and the client.

The widespread use of the contract model in practice is low, as it requires the general contractor to fully disclose the calculation in order to be able to adjust the standard price in the event of changes that the client wishes. The use is limited to those cases in which the general contractor is hired without competition because he sits at the table with his know-how from the beginning of the planning. The building law lawyers have not yet succeeded in submitting draft contracts that are practicable even without deeper trust between the building owner and general contractor.

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