The GMP is a ceiling the Contractor carries
AIA A102-2017 is the owner-contractor agreement for the Cost of the Work plus a Fee with a guaranteed maximum price. The GMP is the maximum Contract Sum.
§5.2.1 states that costs which would cause the GMP to be exceeded shall be paid by the Contractor without reimbursement by the Owner.
- The Owner paying the excess as an addition would defeat the guarantee. The GMP changes only by Change Order.
- There is no equal split, and the Architect's insurer has no role.
Worked example
GMP $2,400,000, no Change Orders. Cost of the Work plus the Fee at completion: $2,515,000.
Excess = $2,515,000 − $2,400,000 = $115,000. The Owner pays $2,400,000 and the Contractor absorbs $115,000.
- Paying $2,515,000 treats the job as cost-plus with no cap.
- Paying $2,457,500 splits the overrun in half, which the form does not provide.
- Having the Contractor absorb $2,515,000 confuses the total cost with the overrun.
Schedule of values lines are not mini-GMPs
A102-2017 §12.1.5.2 states that the schedule of values does not create a separate guaranteed maximum price for each line item. A line may be exceeded as long as the total GMP is not.
Example: drywall runs $18,000 over its allocation while total costs stay well under the GMP. The line may simply be exceeded.
- Treating each line as its own GMP and charging the Contractor the $18,000 is the error the clause prevents.
- No stoppage or Change Order is required, and the $18,000 is not paid on top of the GMP; it is absorbed within the unchanged total.
Retainage is a blank the parties fill
A102-2017 §12.1.8.1 is a blank. One published copy showed "10% until 50% completion, then 5%", but that figure sat inside the guillemets AIA software uses to mark user-entered text. It was inserted by the parties.
- The trap is calling it the standard printed rate.
- A201 §9.4.1 is the Architect's 7-day action on a payment application, not a retainage rate.
- A101 §5.1.7.1 is also a blank, so it prints no fixed 10% either.