In a cost-plus contract with a guaranteed maximum price, what happens if the actual costs exceed the GMP?
Correct Answer
C) The contractor absorbs the excess costs
In a GMP contract, the contractor typically absorbs any costs that exceed the guaranteed maximum price, providing cost protection for the owner.
Why This Is the Correct Answer
In a GMP contract, the contractor typically absorbs any costs that exceed the guaranteed maximum price, providing cost protection for the owner.
More NASCLA Questions
How long should daily reports and project correspondence typically be retained after project completion?
Which AIA document contains the general conditions that govern the rights and responsibilities of all parties in a construction contract?
A construction company has direct labor costs of $85,000, direct materials of $120,000, and overhead costs of $45,000 for a project. What is the total job cost?
What is the primary purpose of job cost accounting in construction?
A construction company has current assets of $350,000 and current liabilities of $280,000. What is the company's working capital?
In CSI MasterFormat, which division covers earthwork and site preparation?
On an electrical plan, a rectangle with three parallel lines inside typically represents:
In a mechanical drawing, what does 'CFM' typically measure?
In CSI MasterFormat Division 08, which of the following would typically be included?
On a mechanical plan, what does the symbol 'RTU' typically indicate?
People Also Study
Business & Financial Management
120 questions · 70% to pass
Contract Administration
60 questions · 70% to pass
Project Management
60 questions · 70% to pass