GMP (Guaranteed Maximum Price)
GMP, or Guaranteed Maximum Price, is a common type of contract in construction projects where the contractor agrees to a maximum cost that won't be exceeded. Think of it like putting a ceiling on project costs - the final price won't go higher than the agreed amount, which protects the client from unexpected expenses. It's different from traditional fixed-price contracts because if the project costs less than expected, the savings are often shared between the contractor and client. This approach is popular in commercial construction, renovations, and large building projects where budgets need to be carefully managed.
Examples in Resumes
Managed $50M commercial project using GMP contract structure, resulting in 8% cost savings
Negotiated Guaranteed Maximum Price agreements for 15+ major construction projects
Led team in developing GMP estimates for healthcare facility construction
Typical job title: "Construction Project Managers"
Also try searching for:
Where to Find Construction Project Managers
Professional Organizations
Job Boards
Professional Networks
Example Interview Questions
Senior Level Questions
Q: How do you handle situations where a project might exceed the GMP?
Expected Answer: A senior manager should explain their process for early detection of potential overruns, strategies for cost control, and experience with contract negotiations and change orders. They should mention documentation procedures and stakeholder communication.
Q: What factors do you consider when establishing a GMP for a large project?
Expected Answer: Should discuss risk assessment, market conditions, material costs, labor availability, project timeline, contingencies, and historical data from similar projects. Should also mention stakeholder consultation and documentation requirements.
Mid Level Questions
Q: Explain the difference between GMP and other contract types.
Expected Answer: Should be able to compare GMP with fixed-price and cost-plus contracts, explaining advantages and disadvantages of each, including risk allocation and cost savings sharing.
Q: How do you track costs against a GMP during project execution?
Expected Answer: Should describe cost tracking systems, regular reporting procedures, change order management, and methods for identifying potential cost overruns early.
Junior Level Questions
Q: What is a GMP contract and its basic components?
Expected Answer: Should explain that GMP sets a maximum price for the project, basic contract elements like direct costs, contractor's fee, and contingencies, and how savings might be shared.
Q: What documentation is typically required in a GMP contract?
Expected Answer: Should mention basic required documents like detailed cost estimates, scope of work, schedule, and change order procedures.
Experience Level Indicators
Junior (0-3 years)
- Basic understanding of construction contracts
- Cost tracking and reporting
- Project documentation
- Basic estimating skills
Mid (3-7 years)
- Contract negotiation
- Cost control management
- Change order processing
- Risk assessment
Senior (7+ years)
- Complex project management
- Strategic cost planning
- Team leadership
- Stakeholder management
Red Flags to Watch For
- No experience with cost tracking or reporting
- Lack of understanding of basic contract terms
- Poor communication skills
- No experience with change order management
- Unable to explain risk management strategies
Related Terms
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