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Guaranteed Maximum Price (GMP)

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Guaranteed Maximum Price (GMP)

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A type of cost plus contract whereby the contractor is reimbursed for all construction related costs, plus a fixed fee. The agreed upon costs and fee are capped, transferring the risk of cost overruns to the contractor, whilst any savings resulting from cost underruns may either be a point of negotiation between the general contractor and the owner or completely realized by the project owner.

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