CM at risk

GMP Estimating and Buyout: The Contractor Process That Turns an Estimate Into a Guaranteed Maximum Price

Guaranteed Maximum Price contracts require the contractor to estimate the project, negotiate the GMP with the owner, and then buy out subcontracts and materials to deliver within the GMP. Accuracy and discipline in this process determine whether the contractor profits or subsidizes the project. Understanding GMP estimating and buyout is essential for contractors pursuing CM at Risk or design-build GMP work.