There are other forms of construction management contracts that provide more financial security to the Owner. One example is a contract that has a guaranteed maximum price (“GMP”) clause. A GMP construction management contract assumes that there’s a general understanding of the Owner’s goals and objectives. In this approach a financial incentive may be included that promotes various value added initiatives by the construction manager that ultimately saves the Owner money. In this scenario the construction manager would receive a bonus, based on a percentage of the net savings.

Construction management contracts have the potential of reducing the overall project schedule by approximately 20% and therefore saving the Owner financially – reducing the cost of construction financing.

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