GMP
Law & Legal abbreviation · Contract
| Stands for | Guaranteed maximum price |
|---|---|
| Categories | Law & Legal |
GMP stands for Guaranteed maximum price, a contract abbreviation.
Construction contract arrangement in which the contractor is paid its actual costs plus a fee up to a capped total, absorbing overruns beyond the cap unless the scope changes. Savings below the cap are often shared between owner and contractor.
Example: The construction manager agreed to a GMP of $48 million once the drawings were 90 percent complete.
Usage notes
Common in construction-manager-at-risk delivery, in which the contractor joins the project during design. Disputes often arise over whether a cost increase reflects a scope change or a risk the contractor must absorb. A contingency inside the GMP covers unforeseen items. In pharmaceuticals, GMP instead means good manufacturing practice.
Related abbreviations
More contract abbreviations
- DPA – Data processing agreement
- EPC – Engineering, procurement and construction
- EULA – End-user license agreement
- FAR – Federal Acquisition Regulation
- FFP – Firm-fixed-price
- FIDIC – International Federation of Consulting Engineers
- IDIQ – Indefinite delivery, indefinite quantity
- ISDA – International Swaps and Derivatives Association
- JVA – Joint venture agreement
- LDs – Liquidated damages
- LOI – Letter of intent
- LPA – Limited partnership agreement
See all 57 contract abbreviations →
This entry is for general education and is not legal advice. Abbreviation use varies between institutions; always confirm in context.