Qualifications and clarifications: the list of things the contractor has not agreed to
Somewhere in the GMP package, usually after the estimate, there is a list with a title like Qualifications and Clarifications or Assumptions and Exclusions. It runs two to eight pages. Each item is a sentence that begins with words like excludes, assumes, or based on. Nobody reads it with the attention they give the total.
That list is the boundary of the guarantee. Inside it, the contractor has promised a maximum price. Outside it, the contractor has promised nothing, and everything outside it that turns out to be needed arrives later as a change order.
What the list usually contains
Some items are sensible and expected. The price assumes normal soil conditions as described in the geotechnical report. The price excludes hazardous material abatement not shown on the drawings. The price assumes utilities are available at the property line. Items like these allocate risks the contractor cannot price, and most contracts would allocate them the same way anyway.
Other items are more pointed. The price carries a specific brand of roofing membrane and any substitution will be a change. The price assumes the owner will provide furniture dimensions by a certain date. The price excludes permit fees, testing and inspection, or builder's risk insurance. Each of those moves a cost from the contractor's column to the owner's, and each should be a conscious decision.
Sorting the list into three piles
The first pile is accept. These are risks the owner is willing to carry or costs the owner planned to pay directly. Note them and move on.
The second pile is price it. These are items the owner wants inside the GMP. A qualification that excludes a scope item shown on the drawings should be removed, and the scope should be priced. A qualification that assumes a lower grade of finish than the specification calls for should be corrected. Each conversion raises the GMP, which is the honest outcome. The alternative is a lower GMP today and a change order later.
The third pile is convert to an allowance. Some items are genuinely unknown and cannot be priced. Rock excavation, soil remediation, or a utility relocation whose scope depends on a survey not yet done. Rather than leaving them as an open exclusion, ask for an allowance with a stated amount. An allowance gives the owner a number to plan around and a reconciliation to track. An exclusion gives the owner nothing.
A fictional example
Picture a fictional $31 million performing arts addition at a community college. The qualifications list has 47 items. After review, 29 are accepted as written. Eleven are sent back to be priced, adding about $640,000 to the GMP. Seven are converted to allowances totaling $520,000. The GMP rises from $29.8 million to about $31 million.
The board asks why the number went up before a shovel was in the ground. The answer is that the number did not go up. The number was always $31 million. The first draft had $1.2 million of it written in sentences instead of figures.
The items that stay
The 29 accepted qualifications do not disappear. They are the record of what the owner agreed to carry, and they are the first place to look when a change order arrives claiming an exclusion. A change order for permit fees is not a dispute if permit fees were an accepted exclusion. It is a dispute if they were not on the list at all.
Keeping the list alive
The qualifications list is signed once and then forgotten. Eighteen months later a change order cites an assumption from page four and nobody on the owner's side can find page four. The fix is to record each accepted qualification as a line item in the owner's ledger at baseline, with its text and its category. When a change order arrives, the register can be searched.
Costwitness holds the qualifications as part of the frozen GMP baseline, alongside the estimate lines and allowances, so a change order can be checked against the original exclusions without a search through the closing binder. Whether the exclusion actually applies to the change is a reading of the contract, and that reading stays with the owner's team.
What to do this month
- Find the qualifications list from your GMP amendment and count the items.
- Sort each item as accepted, should have been priced, or should have been an allowance, even if the amendment is already signed.
- Enter the accepted items into your owner ledger so they can be searched when a change order cites one.
Questions on this
Are qualifications legally binding?
When the amendment incorporates them, yes, in general. They define what the GMP covers. Whether a specific qualification overrides a drawing or a specification is a contract interpretation question, and you should check your contract and ask counsel when it matters.
Can qualifications be removed after the GMP is signed?
Only by agreement, which in practice means a change order. That is why the review before signing matters. After signing, removing a qualification is the same as adding scope, and the contractor will price it.
What if the list contradicts the drawings?
Under most AIA A133 based agreements there is an order of precedence among the contract documents. Which document wins depends on that clause. Raise the contradiction before signing so it does not need to be resolved under the precedence clause later.
In the product
GMP baseline, Change order register, Allowance register. Free tool: Change Order Exposure, Pre-GMP Readiness Score.
Keep reading
Earlier: Setting the GMP at design development versus construction documents. Later: Priced, allowance or assumption: why every GMP line needs a basis flag. All articles on gmp contracts.
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