This form is a Construction Contract that may be executed with either a cost plus or fixed fee payment arrangement. The form contains the following additional subject matters and complies with the laws of the State of Florida: scope of work, work site, warranty and insurance.
Cost Plus Contract Template With Guaranteed Maximum Price
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Unlike a lump sum contract wherein a contractor is paid a flat fee for the work, the guaranteed maximum price contract allows the owner to potentially save money if the project ends up costing less than estimated.
A stipulated sum contract, also called a lump sum or fixed price contract, is the most basic form of agreement between a contractor and owner.
Guaranteed Maximum Price (GMP or GMAX) contract means a cost-plus agreement with a cap on the owner's total liability for the costs of construction of the project, also considered the not to exceed price by the Owner.
The guaranteed maximum price is the most a contractor can bill a customer for a project. Also known as "not-to-exceed price" contracts, these agreements require customers to compensate contractors for their direct costs and a fixed fee for overhead and profit, but only to a certain threshold.
Cost-Plus GMP Contract Agreements are cost reimbursement contracts. In a Cost-Plus price arrangement, there is no set or Fixed Fee. In other words, the contractor is paid for the Cost of the Work it incurs to complete the project, plus a Fee, not-to-exceed the GMP (absent scope changes or extenuating circumstances).
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Master Contract - GMP Construction v4. If the actual cost of the works is higher than the guaranteed maximum price, then the contractor must bear the additional cost.Maximum Price ("CPGMP") contracts which must be examined when considering whether such a contract is appropriate for a project. Overview. A CostPlus pricing option with GMP provides an upper limit on total construction costs and fees for which an owner is responsible.