Aia Gmp Agreement

The AIA GMP Agreement: Understanding the Basics

As an architect or a construction professional, you are probably familiar with the term GMP (Guaranteed Maximum Price), which is a type of construction contract that provides for the completion of a project within a fixed budget. However, you may not be as familiar with the AIA GMP agreement, which is a standardized form of contract developed by the American Institute of Architects (AIA) specifically for GMP contracts.

An AIA GMP agreement is a contract between the owner of a construction project and the contractor, where the contractor agrees to provide construction services based on a guaranteed maximum price for the project. The agreement is divided into two main parts: the contract documents and the AIA Document G732, the GMP amendment.

The contract documents typically include the project drawings, specifications, and other relevant documents that describe the scope of work to be performed. The GMP amendment, on the other hand, specifies the guaranteed maximum price and the procedures for determining the contract sum.

One of the key advantages of the AIA GMP agreement is that it provides a clear and concise method for determining the cost of the project. This helps to minimize the risk of cost overruns and disputes between the owner and the contractor. The agreement also includes provisions that allow for adjustments to the GMP in the event of changes to the scope of work or unforeseen circumstances.

In addition, the AIA GMP agreement provides a framework for the management of the construction project. The agreement requires the contractor to provide detailed cost estimates and schedules, as well as regular progress reports. The owner is also required to make regular payments to the contractor based on the work performed, which helps to ensure that the project stays on track and within budget.

Finally, the AIA GMP agreement includes provisions for dispute resolution. If a dispute arises between the owner and the contractor, the agreement provides for mediation or arbitration as a means of resolving the dispute without the need for expensive and time-consuming litigation.

In conclusion, the AIA GMP agreement is a powerful tool for managing construction projects. By providing a clear and concise method for determining the cost of the project, as well as a framework for project management and dispute resolution, the agreement helps to minimize the risk of cost overruns and disputes between the owner and the contractor. As such, it is highly recommended for any construction project that is being executed under a GMP contract.

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