Guaranteed Maximum Price

From Wikipedia, the free encyclopedia

This article is orphaned as few or no other articles link to it. Please help introduce links in articles on related topics. (January 2007)

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 (also known as Stipulated Price or Lump Sum) contracts, where cost savings are typically retained by the contractor, and essentially become additional profits.