In a Guaranteed Maximum Price (GMP) contract with a $4,000,000 GMP and shared savings of 50/50, if actual costs are $3,700,000, how much does the contractor receive?
Correct Answer
A) $3,850,000
Savings = $4,000,000 - $3,700,000 = $300,000. Contractor's share of savings = $300,000 × 50% = $150,000. Total compensation = $3,700,000 + $150,000 = $3,850,000.
Why This Is the Correct Answer
Savings = $4,000,000 - $3,700,000 = $300,000. Contractor's share of savings = $300,000 × 50% = $150,000. Total compensation = $3,700,000 + $150,000 = $3,850,000.
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