Guaranteed Maximum Price Contract Template

Standard form prime contract between owner and contractor cost plus fee with an option for a guaranteed maximum price this agreement the contract is entered into this day of 20 between owner name and address of owner and contractor name and address of contractor.

Guaranteed maximum price contract template. Aia document a1022007 is not intended for use in competitive bidding. This standard form of agreement between owner and contractor is appropriate for use on large projects requiring a guaranteed maximum price when the basis of payment to the contractor is the cost of the work plus a fee. 61 adjustments to the guaranteed maximum price on account of changes in the work may be determined by any of the methods listed in article 7 of aia document a2012017 general conditions of the contract for construction. This type of legal agreement sets a ceiling or maximum price for which a person or entity will pay for a certain project.

A construction project for example is often governed by a guaranteed maximum price contract gmp. This article explains the basics of guaranteed maximum price construction contracts including an explanation of contingencies and allowances two common components of these types of contracts. Guaranteed maximum price for construction contracts designing buildings wiki share your construction industry knowledge. Overview pure tracy londoncost plus contracts are rare in many markets.

General contractor agreements explained. However cost plus is more common as a method of calculating interim payments in contracts whose outturn cost is capped by a guaranteed maximum price gmp or target cost mechanism. A contractor such as a homebuilder is compensated for actual costs incurred. A desire for risk reduction may make a customer push for a guaranteed maximum price contract gmp.

3111 the cost of the work listed in section 32 hereof for full and complete performance of the work in strict accordance with contract documents and. For a broader discussion on general contractor agreements check out our article. The contract amount shall be a guaranteed maximum price comprised of the total of direct costs of construction general job expenses and contractors fee for overhead and profit. Considering whether such a contract is appropriate for a project.

The contractor guarantees the contract amount shall not exceed dollars. In its basic form a guaranteed maximum price or gmp says a customer will pay you the contractor for the costs of doing the job plus an agreed amount of profit to youup to a predefined maximum level.