Guaranteed Maximum Price

A guaranteed maximum price (also known as GMP, not-to-exceed price, NTE, or NTX) contract is a cost-type contract (also known as an open-book contract) where the contractor is compensated for actual costs incurred plus a fixed fee subject to a ceiling price.

The contractor is responsible for cost overruns, unless the GMP has been increased via formal change order (only as a result of additional scope from the client, not price overruns, errors, or omissions).

Savings resulting from cost underruns are returned to the owner.

This is different from a fixed-price contract (also known as stipulated price contract or lump-sum contract) where cost savings are typically retained by the contractor and essentially become additional profits.