Cost plus or guaranteed maximum price (GMP)

2 Replies


So I’m working on a project and as we all know lumber is insanely expensive and volatile. Therefore, GCs are requiring lumber addendums and lumber suppliers are not locking in prices until your ready to take delivery.

I’m wondering what’s the best contract route guaranteed maximum price (GMP) or cost+ GC fee.

I suspect that on top of the line items for GC Fee, overhead as general conditions the GCs pad most of the other line items such as HVAC, Windows, etc. in an effort to save money due to increased lumber costs I wanted to explore the cost plus route.

What are your thoughts?

@Mayer M.

Cost plus can work great if you have a reputable contractor however you can very easily being taken advantage of if the contractor is less then honest. (Contrary to a what seems like a popular opionion here not all contractors are dishonest. They need to make just like you and need to charge accordingly).

If you know the contractor and he agrees to it I say go for it.