In a cost-plus contract with a guaranteed maximum price, how should a contractor handle cost overruns that exceed the guaranteed maximum?
Correct Answer
D) Absorb overruns above the guaranteed maximum
In a cost-plus contract with guaranteed maximum price (GMP), the contractor absorbs any costs that exceed the guaranteed maximum price, providing cost protection to the owner.
Why This Is the Correct Answer
In a cost-plus contract with guaranteed maximum price (GMP), the contractor absorbs any costs that exceed the guaranteed maximum price, providing cost protection to the owner.
More NASCLA Questions
Which AIA document contains the general conditions that govern the rights and responsibilities of all parties in a construction contract?
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