A Guaranteed Maximum Price is the most an owner will pay for a defined construction scope. It includes the cost of work, the construction manager's fee, general conditions and contingency. If costs exceed the GMP, the contractor absorbs the overrun; if they come in under, savings typically return to the owner.
If you’re planning a project using Construction Manager at Risk, you’ll hear one term constantly: GMP, or Guaranteed Maximum Price. Here’s what it means and why it matters.
The short definition
A Guaranteed Maximum Price is a contract ceiling. The construction manager guarantees that the cost of delivering a defined scope of work will not exceed a stated amount. If actual costs run higher, the contractor covers the difference. If they come in lower, savings are typically shared with or returned to the owner, depending on the contract.
What’s inside a GMP
A typical GMP includes:
- Cost of the work — subcontracts, materials, equipment and labor
- General conditions — the contractor’s on-site supervision, temporary facilities, trailers, safety and cleanup
- Construction manager’s fee — usually a percentage of the cost of work
- Contingency — a construction contingency for the CM’s use on unforeseen items, plus any owner contingency
- Insurance and bonds
- Allowances for items not fully designed when the GMP is set
When is the GMP set?
Usually when the drawings are substantially complete — often at the end of design development or partway through construction documents. Henson’s preconstruction services build toward that moment: preliminary estimates at each design milestone, constructability review, value engineering and subcontractor bidding all sharpen the number before it’s guaranteed.
How Henson protects your GMP
- Real local cost data. Our estimates use past project and current market cost data from decades of building in northwest Oklahoma.
- More bids. Our extensive list of qualified subcontractors and suppliers means more competitive pricing for every division.
- Weekly job-cost reports. We track every division in Timberline and report expenses to date and balance remaining each week.
- Lower built-in costs. Our 0.80 EMR and low bond rates reduce insurance and bonding costs inside the GMP.
Is a GMP right for you?
A GMP is a strong fit when your budget is fixed — like a bond-funded school — or when you need price certainty before design is 100% complete. Contact Henson Construction to discuss whether CM at Risk with a GMP fits your project.
Published by Henson Construction Co., Enid, Oklahoma. Last updated August 20, 2026.
