Blog topic
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 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 minBuyout and shared savingsWhen a package is bought above its GMP lineA package bought over its carried value is a buyout overrun. The question for the owner is which fund absorbed it and whether the record shows that.Apr 1, 2026 · 4 minBuyout and shared savingsBuyout coverage at GMP: how much of the price is a subcontract, not an estimateAt GMP signing, part of the price is subcontracts and part is estimates. Buyout coverage measures the split and tells the owner how much can still move.Mar 29, 2026 · 4 minBuyout and shared savingsAn allowance is a promise to find out laterAllowances look like line items but behave like open questions. This post explains what an allowance is inside a GMP and why the owner should treat each one as unfinished business.Mar 26, 2026 · 4 minBuyout and shared savingsAllowance reconciliation: how and when it should happenReconciling an allowance is a small transaction with a contract behind it. Here is the sequence, the documents, and the timing an owner should expect.Mar 23, 2026 · 4 minBuyout and shared savingsAllowance decision deadlines and what a missed one costsAllowance deadlines are owner obligations hidden in the schedule. Missing one turns an allowance variance into a delay claim. Here is how to keep them visible.Mar 20, 2026 · 4 minBuyout and shared savingsWhy an allowance set at 50 percent design carries a wider band than one set at 90The same allowance means different things at 50 percent and 90 percent design. A confidence band captures that difference and feeds a more honest anticipated final cost.Mar 17, 2026 · 4 minBuyout and shared savingsThe shared savings clause: how it works and what it paysShared savings is the closeout payout that rewards a contractor for finishing under the GMP. This post walks through the mechanics from the owner's side.Mar 14, 2026 · 4 minBuyout and shared savingsSplit percentages, caps and carve outs in shared savingsA 75 to 25 split sounds simple until you read the cap and the carve outs. This post explains the three terms that shape what a savings clause actually pays.Mar 11, 2026 · 4 minBuyout and shared savingsThe sensitivity table: what the pool becomes if open items land either wayOpen change orders, unreconciled allowances and unbought packages can each move the savings pool. A sensitivity table shows the board the range, not just the midpoint.Mar 8, 2026 · 4 minBuyout and shared savingsHow allowance overruns eat the savings poolAllowance overruns reach the owner one of two ways: a higher GMP or a smaller savings pool. This post shows why the route matters and how to see it coming.Mar 5, 2026 · 4 minBuyout and shared savingsSubcontractor default and the buyout risk an owner carriesA defaulting subcontractor is the contractor's problem first and the owner's problem soon after. Here is how the cost moves and what the owner's ledger should show.Mar 2, 2026 · 4 minBuyout and shared savingsA buyout log for owners: the five fields that matterPackage, carried value, awarded value, status and disposition. With those five fields an owner can track buyout, coverage and savings without the contractor's cost report.Feb 27, 2026 · 4 minBuyout and shared savingsCloseout reconciliation: checking the savings figure before you sign offThe final pay application presents a savings figure. Before accepting it, the owner should rebuild it from the ledger. This post gives the order to check in.Feb 24, 2026 · 4 min
One next step
See the savings pool on a project like yours.
Thirty minutes on a call. Buyout package by package, the allowance register, and the projected pool on your split terms.