Today’s construction world is more sophisticated than ever. Projects are larger and more complex. Sustainable design and green construction require more specialized building materials and systems. And we use more technology now, and more consultants and specialists.
One delivery method that effectively addresses these modern-day complexities is general contracting with a guaranteed maximum price (GMP). By treating the building process – planning, design, bidding, construction and occupancy – as integrated tasks, GMP general contracting enables the owner to better control cost and schedule, and realize increased value.
The early stages of the building process – planning, design and bidding – are carried out by a construction team consisting of the owner, the architect and his consultants, and the contractor. The owner identifies his requirements for the project; the designers put those requirements into a set of plans and specifications; and the contractor ensures that the final design represents a quality, cost-effective, affordable project that meets the owners needs. With no vested financial stake in the project at this point – in either its design or construction – the contractor operates as the owner’s advocate, advising on all issues effecting quality, cost and schedule based solely on what’s best for the owner.
Once pre-construction is complete and the GMP has been approved by the owner, the contractor relinquishes the role of owner advocate and takes on that of general contractor. He holds all trade contracts in his name and assumes the entire risk for construction quality, cost and schedule. If the final cost of construction is less than the GMP, the owner keeps the “savings.” If the final cost of construction exceeds the GMP, the contractor pays the excess. It’s the best of both worlds.
AZ Contractor License ROC233369
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