What does GMP stand for in project delivery terms?

In project delivery terms, GMP stands for Guaranteed Maximum Price. This is a pricing agreement where the contractor guarantees that the project will not exceed a specified price threshold. This arrangement provides financial protection for the owner by capping the total cost of the project, which encourages effective project management and cost control from the contractor.

The Guaranteed Maximum Price is particularly beneficial in construction and project management because it incentivizes the contractor to complete the project efficiently while keeping costs down, as they bear the risk of overruns beyond the agreed maximum price. This contrasts with other pricing agreements that may not offer the same level of cost assurance to the owner.

In project delivery contexts, the use of GMP can lead to better collaboration between stakeholders and encourages more effective communication throughout the project's lifecycle, ultimately resulting in a more successful outcome.