A "guaranteed maximum price" (GMP) contract protects the owner because:
Explanation
A guaranteed maximum price reimburses cost up to a negotiated ceiling and the contractor absorbs anything above it, which is exactly what caps the owner's exposure. A lump sum paid regardless of what the costs run is a stipulated-sum contract, a different form with a different split of risk. Cost plus a fee with no ceiling is the open cost-plus arrangement a GMP exists to cap. And an underrun below the ceiling belongs to the owner unless a shared-savings clause says otherwise, so treating the savings as the contractor's reverses the deal.
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