Control Estimate vs. GMP

The Control Estimate is the sum of the CM’s estimate for the cost of the work plus the CM’s fee.
So seems the GMP to be. Can someone please explain the difference between the Control Estimate and GMP?
Thank you.

Ok… I guess I need to clarify:

In the CM at Risk delivery method the Architect’s CA services begin when one of these three things happen:

  1. The Owner accepts the CM’s GMP
  2. The Owner approves CM’s Control Estimate
  3. The Owner issues a notice to proceed to the CM

Is the Control Estimate just a preliminary version of the GMP?
If so, at what point does the Control Estimate become the GMP?

Thank you,

Andrew

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Hi @andrew ! Let’s get one of our experts to answer these questions for you.
@coachjasongolub could you help Andrew?!

Hi @andrew ,

I did some research into this, and their are some differences in the definitions of a GMP and Control Estimate.

A control estimate is often used in cost-plus contracts. It is used to establish a target price, but it has no legal bearing.

On the other hand, a GMP has legal bearing. It is a sum agreed upon by the owner and the contractor to be the maximum compensation the owner will pay the contractor for the work agreed upon in the contract.

The GMP becomes ‘The GMP’ when it is written into the contract. Before it is written in the contract, in my own personal work experience it is often refereed to as ‘preliminary estimate’ or ‘preliminary pricing’.

What’s tricky here is that all CM at Risk projects are a type of CM as Constructor delivery, but not all CM as Constructor projects are CM at Risk; it is once the contractor is providing aGMP that people begin to refer to this delivery type as CM at Risk. There are CMc projects that do not give a GMP, and this is when a Control Estimate may come into play.

The AIA’s website on CMc family of contracts is a helpful reference:
https://www.aiacontracts.org/contract-doc-pages/27151-construction-manager-as-constructor-cmc-family

I personally always like to refer back to the Architect’s Handbook of Professional practice!

Hope this helps.

-Darion

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Thanks Darion! Very helpful.
I will need to read the AIA CMc contracts (which apparently are not required by NCARB).
I’ll check the AHPP as well.

Andrew

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Hi @coachdarionziegler ! You are killing it on the ARE Community! We would love to have you on our new FB Group as well! I sent an email, please let me know if you are interested!

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