It is a type of construction contract in which the contractor guarantees a maximum price for the project. The contractor is responsible for any cost overruns above the guaranteed maximum price, unless they are caused by unforeseen circumstances beyond the contractor’s control. The contracts are typically used for complex and large-scale projects, where it can be difficult to accurately estimate the cost of the project in advance. GMP contracts can also be used for projects where the owner wants to minimize their risk of cost overruns.

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