Blog
Reading for owners on a GMP contract.
One hundred ten articles on the inside of the guaranteed maximum price: the two contingency funds, the cause on every change, buyout and shared savings, and the report the board and the lender read. Written for the party that signs, not the party that builds.
GMP contracts
How a guaranteed maximum price contract works from the owner's side, and where the money moves inside it.
GMP contractsUnit prices and alternates inside a GMP: what the owner should record before they are usedA GMP carries unit prices for uncertain quantities and alternates the owner may accept later. What to record so the rule is applied as written.Sep 9, 2026 · 5 minGMP contractsThe GMP in its last month: what moves in the weeks before substantial completionThe last month before substantial completion brings the final change orders, the last allowances and the first savings figure. What to settle first.Sep 2, 2026 · 5 minGMP contractsSelf-performed work inside a GMP: how the owner reads a package the contractor gave itselfWhen the CM performs a trade with its own crews, the package is never bid. What the owner asks for, and how the ledger treats the line.Aug 27, 2026 · 5 minGMP contractsThe GMP amendment's exhibits: which pages the owner's ledger is built fromA GMP amendment is a short document with long exhibits. Which exhibit feeds which register, and what to copy out before the first pay application arrives.Aug 21, 2026 · 6 minGMP contractsWhat a GMP contract is, read from the owner's sideThe GMP is a ceiling, not a price. This post explains what moves underneath it and what an owner should keep a record of from the first pay application.Aug 20, 2026 · 4 minGMP contractsCM at risk versus design bid build: what changes for the ownerUnder design bid build the owner buys a price. Under CM at risk the owner buys a process with a cap on it. Here is what that shift means for oversight.Aug 17, 2026 · 4 min
Contingency
Contractor contingency and owner contingency: who draws, who approves, and when the fund runs out.
ContingencyRestoring contingency: when a change order is withdrawn or a draw is reversedA reversed draw or a withdrawn change order puts money back into a fund. Where it goes, and why the ledger keeps the round trip instead of deleting it.Sep 3, 2026 · 5 minContingencyContingency at the midpoint: the numbers that should be true when the job is half builtHalfway through a GMP job the contingency position can still be corrected. Five numbers to check at 50 percent complete, and what each means.Aug 28, 2026 · 5 minContingencyContingency transfers between the two funds: when the contractor asks to move moneyMoving contingency from the owner's fund to the contractor's is a change order under another name. What to ask, and how the ledger records it.Aug 22, 2026 · 5 minContingencyContractor contingency versus owner contingency: two funds, two purposesTwo funds sit near each other in a GMP budget and get confused constantly. Here is what each one is for and who should be drawing on it.Jul 6, 2026 · 4 minContingencyWho approves a contingency draw, and who shouldThe contract names who can approve a contingency draw. The owner's job is to know that rule before the first draw appears on a pay application.Jul 3, 2026 · 4 minContingencyContingency burn rate: how to read it against percent completeA contingency balance by itself says nothing. Read it against how far along the work is, and the same number tells a different story.Jun 30, 2026 · 4 min
Change orders
Cause classification, notice deadlines, and the difference between owner scope and a design gap.
Change ordersOpen change orders in the forecast: weighting what is not yet signedPending change orders belong in the anticipated final cost at a fraction of their value. Which fraction, set by what, and how to keep it honest monthly.Sep 7, 2026 · 5 minChange ordersZero dollar change orders: time extensions and scope swaps that still need a causeA change order with no money on it still changes the contract. Time extensions and substitutions belong in the register with a cause and a date.Sep 4, 2026 · 5 minChange ordersChange order pricing review: what the owner checks before the cause is settledThe cause decides who pays. The price decides how much. Check them in that order, or pay for a change that was never yours.Aug 29, 2026 · 5 minChange ordersA notice calendar built from the change order register, not from memoryEvery change order carries a notice deadline counted from the event. Here is how the register becomes a calendar, and which dates the owner is counting.Aug 23, 2026 · 5 minChange ordersCause classification: owner scope, design gap, unforeseen, coordinationFour causes cover almost every change on a GMP project. Each one points at a different fund, which is why the owner should name the cause early.May 22, 2026 · 4 minChange ordersOwner scope change or design gap: the same duct conflict, two different billsOne duct, one beam, one PCO. Whether it lands on the owner or the architect depends on a question most owners never ask out loud.May 19, 2026 · 4 min
Buyout and shared savings
What each package carried in the GMP, what it was bought for, and what is left to split at closeout.
Buyout and shared savingsPackages bought late in the job: what the last awards do to the savings poolFinishes and signage are bought last, into a market the GMP did not price. What late buyout does to the projected pool, and how to read the last awards.Sep 8, 2026 · 5 minBuyout and shared savingsShared savings when the GMP was amended: which ceiling the split is measured againstWhen change orders have raised the GMP, the savings clause has two ceilings to choose from. Which one applies, what it does to the pool, how to keep both.Sep 5, 2026 · 5 minBuyout and shared savingsAllowance or contingency: which fund a surprise should draw fromAn overrun can be charged to an allowance, to contractor contingency or to owner contingency. Three different closeouts. How to decide and record it.Aug 30, 2026 · 5 minBuyout and shared savingsScope gaps at buyout: when a package is awarded low because something was left outA trade package bought under its GMP line looks like a saving. Sometimes it is a gap that comes back as a change order. How the owner tells the two apart.Aug 24, 2026 · 5 minBuyout and shared savingsBuyout: what it is and why the owner should track it package by packageBuyout is the process of turning each estimated trade into a signed subcontract. Owners who track it by package know how much of the GMP is real.Apr 7, 2026 · 4 minBuyout and shared savingsBuyout savings: who owns them under a CM at risk contractWhen a package is bought under its GMP value, the saving has an owner. The contract decides who, and it often says so in three separate clauses.Apr 4, 2026 · 4 min
Owner reporting
Pay applications, anticipated final cost, and the monthly report the board and the lender read.
Owner reportingThe first monthly report: what to show when the project is one month oldThe first report sets the format the board will read for two years. What it holds when almost nothing has happened, and why the empty sections matter.Sep 6, 2026 · 5 minOwner reportingOwner ledger and contractor cost report: reconciling the two once a monthThe contractor's cost report and the owner's ledger never match. Which differences are expected, which need a question, and how to close them monthly.Aug 31, 2026 · 5 minOwner reportingReporting a bad month: how to put an overrun in front of the boardThe month the anticipated final cost crosses the GMP is the month the report matters. What to show, in what order, and what not to leave out.Aug 25, 2026 · 5 minOwner reportingHow to read a G702 and G703 pay application as an ownerThe G702 is the summary and the G703 is the evidence. Most owners sign the first without reading the second.Feb 21, 2026 · 4 minOwner reportingAnticipated final cost: the number that matters more than the GMPThe GMP tells you the most you can be asked to pay. Anticipated final cost tells you what you will probably pay. They are rarely the same number.Feb 18, 2026 · 4 minOwner reportingThe anticipated final cost waterfall, step by step from the GMPStart at the GMP. Subtract buyout savings, add change orders, adjust allowances, draw contingency. Each bar is a step the board can question.Feb 15, 2026 · 4 min
By owner type
Developers, owner's representatives, school districts, universities and public agencies on CM at risk.
By owner typeCorporate owners building a headquarters: a one time owner on a GMP contractA company building its own headquarters has a CFO, an auditor and a board, and no construction department. What finance needs from the GMP record.Sep 1, 2026 · 5 minBy owner typeNonprofit owners: a board that reads the report once a quarterA nonprofit building once, with a volunteer board and a capital campaign behind the GMP. What the quarterly reader needs from the monthly record.Aug 26, 2026 · 5 minBy owner typeSchool district bond programs on CM at risk: what the board needs to see monthlyA bond program runs for years and the board reads one report a month. What that report should carry on a CM at risk contract, building by building.Jan 7, 2026 · 4 minBy owner typeUniversity capital projects: GMP oversight across several buildings at onceA capital projects office with five GMPs open and three project managers. How to keep each contract's contingency, changes and buyout on one consistent page.Jan 4, 2026 · 4 minBy owner typeDevelopers: how a GMP overrun reaches the equity waterfallA developer's hard cost overrun does not stop at the construction budget. It moves through the loan, the equity and the promote. Where to watch it early.Jan 1, 2026 · 4 minBy owner typeOwner's representatives: one ledger per owner, one portfolio view for youEach client owns their GMP record. The rep needs to see all of them at once without mixing them up. How to structure the books when you serve several owners.Dec 29, 2025 · 4 min
One next step
Read the ledger instead of the summary.
Thirty minutes on a call. We walk the nine modules on a fictional project at your GMP size.