Our Guaranteed Maximum Price procurement (GMP) method
Offering pretty much exactly what it says on the tin, a Guaranteed Maximum Price (GMP) procurement method involves giving clients a clear price that won’t be exceeded during the entire build contract (unless, of course, they significantly change the brief).
The GMP method is a great one for our customers, as it provides cost certainty from the outset – giving them total peace of mind that their project won’t exceed budget. As an additional bonus, our GMP offering also includes an incentive scheme whereby any savings we make on the contract are split 50-50 with the client – meaning there’s the possibility a project will actually come in under-budget. The GMP method is reasonably common in the trade, and primarily used on design and construct contracts.
Happily, there are a myriad of benefits to using a GMP contract. Not only can the client rest easy knowing the total cost of their project from the start of the project – they also know there’s an incentive for their builder to find savings that can then be shared. When compared to the traditional lump sum method of procurement, the GMP method gives the contractor full coordination and management of the design and construction.
When working on a GMP procurement method, we break the process into clear phases including a design phase, which is charged for and includes the formulation of the GMP itself. In order to put together a truly accurate GMP, we’ll complete the design of the building during what we call a design-development phase – letting us gather together appropriate trade pricing which informs the final outcome of the GMP. After the GMP is agreed upon we’ll move into the construction phase, in which the contract itself is executed – always looking for opportunities to find savings that can then be passed on to our clients.
Overall, our experience of working closely with clients from the earliest design stage of a project is that the very best results are achieved – and this is compounded by the convenience and potential cost savings of using a GMP procurement method. Of the many happy customers we’ve worked with over the years, we’re often told that the peace of mind provided by a GMP contract is absolutely invaluable – and that kind of feedback, for us, is priceless.