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11 Jul 2019 11:25:57 UTC
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What is GUARANTEED MAXIMUM PRICE? What does GUARANTEED MAXIMUM PRICE mean?
What is GUARANTEED MAXIMUM PRICE? What does GUARANTEED MAXIMUM PRICE mean? GUARANTEED MAXIMUM PRICE meaning - GUARANTEED MAXIMUM PRICE definition - GUARANTEED MAXIMUM PRICE explanation.

A guaranteed maximum price (also known as GMP, not-to-exceed price, NTE, or NTX) contract is a cost-type contract (also known as an open-book contract) where the contractor is compensated for actual costs incurred plus a fixed fee subject to a ceiling price.

The contractor is responsible for cost overruns, unless the GMP has been increased via formal change order (only as a result of additional scope from the client, not price overruns, errors, or omissions). Savings resulting from cost underruns are returned to the owner.

This is different from a fixed-price contract (also known as stipulated price contract or lump-sum contract) where cost savings are typically retained by the contractor and essentially become additional profits.
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https://www.youtube.com/watch?v=Vh3qCsC86VY
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