In the CMAR process, what does "Guaranteed Maximum Price" (GMP) ensure?

The concept of "Guaranteed Maximum Price" (GMP) is a fundamental aspect of the Construction Manager at Risk (CMAR) delivery method. It establishes a ceiling on the cost of a project, ensuring that the project will not exceed a predetermined cost agreed upon by the owner and the contractor. This provides financial security for the owner, as they are protected from unexpected costs that might arise during the construction process.

When a GMP is set, it typically includes not only the construction costs but also a portion for contingencies, which allows for some flexibility in handling unforeseen issues without pushing the project over budget. However, it is important to note that if the final costs come in under the GMP, the savings may either be shared between the owner and the contractor, or the owner may benefit from the lower costs entirely, depending on the contractual arrangement.

The other options do not accurately reflect the purpose of GMP. There is not unlimited funding for changes, as changes would need to be managed within the confines of the GMP. While GMP can lead to savings for the client, that is not its primary purpose. Additionally, a GMP does not guarantee a quick completion timeline; rather, it focuses on cost certainty.