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Guaranteed maximum price for construction contracts. A guaranteed maximum price (GMP) is a form of agreement with a contractor in which it is agreed that the contract sum will not exceed a specified maximum.
While the GMP contract is popular in the construction industry, it isn't the only type of legal arrangement used in building projects. A cost plus contract is similar to a GMP agreement in that compensation is based on costs incurred and a set fee. The only difference is that a cost plus contract may not include a ceiling or maximum price. A fixed-price contract (also called a stipulated price or lump-sum contract), on the other hand, sets the contractor's compensation at the outset of the project.