A construction manager at risk proposes reimbursement of costs plus a fee, but the owner wants a ceiling on the total payable amount. Which contract feature addresses that ceiling?
Correct Answer
C) Guaranteed maximum price
A guaranteed maximum price establishes a contractual ceiling on the reimbursable-cost-plus-fee arrangement, subject to authorized changes. Other choices do not create the overall price ceiling.
Why This Is the Correct Answer
A guaranteed maximum price establishes a contractual ceiling on the reimbursable-cost-plus-fee arrangement, subject to authorized changes. Other choices do not create the overall price ceiling.
Why the Other Options Are Wrong
Option A: Unpriced RFI log
Choice A (Unpriced RFI log) is rejected because it leaves out the controlling GMP contract result: Guaranteed maximum price.
Option B: Voluntary alternate
In procurement and contracting, Voluntary alternate is the wrong selection for GMP contract: the choice would not get the project to Guaranteed maximum price, which is the GMP contract result verified by the source.
Option D: Use the payment application file as the backup record for gMP contract
Choice D gives Punch-list holdback only. Its specific error: it leaves the work at an informal or incomplete stage, while GMP contract requires Guaranteed maximum price. The accepted answer is Guaranteed maximum price.
Memory Technique
Link GMP contract to its book condition; a different condition means a different answer than Guaranteed maximum price.
Reference Hint
Open Construction Project Management, 5th Ed. (2022); use the index entry or section for "Guaranteed maximum price contracts" to confirm that A guaranteed maximum price establishes a contractual ceiling on the reimbursable-cost-plus-fee arrangement, subject to authorized changes.
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