Pre-GMP Cost Risk Review

Once a Guaranteed Maximum Price is established, the contractor absorbs most of the financial risk for costs exceeding it, which means the completeness and coordination quality of the drawing set at the point the GMP is set matters enormously to every party involved.

Why This Moment in a Project Carries Outsized Risk

A GMP is typically set once design has progressed far enough for a contractor to price the scope with reasonable confidence, often near or at completion of construction documents. Any coordination gap, scope gap, or code compliance issue that's still hidden in the drawings at that point becomes a shared risk: the contractor may end up absorbing an unanticipated cost, or the owner may face a dispute over whether an issue constitutes a legitimate change versus something that should have been priced into the original GMP.

What a Pre-GMP Review Specifically Checks

A pre-GMP review looks for the same categories of issues a good pre-permit review would catch, cross-discipline coordination conflicts, missing scope, spec-to-drawing mismatches, but with particular attention to anything that could affect pricing accuracy or trigger a dispute once the GMP is locked in. Overlay-based coordination checking is especially relevant here, since an undetected clash between disciplines is exactly the kind of issue that surfaces as a costly, disputed change order once construction is underway and the GMP no longer has room to absorb it cleanly.

Why Both Owner and Contractor Benefit

An owner benefits from a pre-GMP review because it reduces the likelihood of change orders that erode project budget after the price is supposedly fixed. A contractor benefits because it reduces the risk of absorbing costs for issues that were already present in the drawings before they priced the work, issues they'd otherwise have no practical way to have caught during a compressed bidding or pricing period.

Where This Fits in the Process

Pre-GMP review typically happens once construction documents are substantially complete but before final GMP negotiation, giving enough time to identify and resolve major issues without unreasonably delaying the pricing process. Structured AI's QA/QC Compliance Checks and Document Chat support a fast enough review cycle that this doesn't have to add significant time to an already time-pressured phase of the project.

FAQ

Who typically commissions a pre-GMP review? This varies by project delivery method and who holds the most direct financial exposure, though owners, owner's representatives, and contractors under a GMP arrangement all have direct incentive to support a thorough pre-GMP review.

Does a pre-GMP review replace the contractor's own estimating and constructability review? No. It's complementary, focused specifically on drawing coordination and completeness issues that could affect pricing accuracy, alongside whatever estimating and constructability review the contractor is independently conducting.

What happens if a significant issue is found during pre-GMP review? It gets resolved through design coordination before the GMP is finalized, which is far less disruptive and costly than discovering the same issue after the price is locked and construction is underway.