GLOSSARY TERM  
  Guaranteed Maximum Price Contract (GMP)  
 
  DESCRIPTION  
  A contract which caps the Contractor’s entitlement to payment at a maximum price, subject only to legitimate increases, such as authorised changes to the employer’s outline or basic Design requirements. Under GMP Contracts Principals have considerable certainty over what the final cost of a project will be, and there is generally a provision for the distribution of any additional profit achieved through the cost saving measures (which would benefit the Contractor if the costs were lower than anticipated).