Industry player on GMP Contract

### ODT Online Thu, 23/04/2009 – 7:31pm.
Comment by gplusa on Coming Clean ?
A timely reminder to all who seem to think that the stadium will be built for a total cost within the GMP (Guaranteed Maximum Price). This is not true. What the average person believes a Maximum Price to mean, is not what the phrase means in this contract. For the benefit of those who have missed it previously, we can repeat the problem again.
ODT Link

Link to CEO Report

Posted by Elizabeth Kerr



Filed under Architecture, Design, Economics, Hot air, Media, Politics, Site, Stadiums

2 responses to “Industry player on GMP Contract

  1. Jay

    Where does this information come from. Did you not read the GMP summary given to the public meeting on the contract? It listed all the areas of risk and they included only a change in scope. The profit margin was in the GMP as were many of the issues you have listed. The biggest area of risk was the foundations and the council chose to move this risk to Hawkins at a cost and hence mitigate that risk.

  2. Phil

    I didn’t attend the meeting that you are referring to, so I can’t speak for what was told to you. However, by following the link in the original article above, the following extract is taken directly from the Council lawyers (Anderson Lloyd) contract summary report:

    The GMP: The GMP as at the date the Contract is signed (i.e. before any Scope Amendments) is made up of:
    a. the ‘Guaranteed Maximum Construction Sum’ – This is the amount it is predicted at tender time that the construction ‘Works’ will cost, excluding items b. to d. below;
    b. the ‘Provisional Sum’ – This is the total of the provisional sum items stated in Schedule 83;
    c. the ‘Fixed Preliminaries and General Sum’ (usually shortened to “Fixed P&G”) – This is the dollar figure stated in Schedule 2, Item 3.2 b.;
    d. the ‘Fixed Percentage Margin Sum’ – This is the Contractor’s profit margin. It is an agreed percentage of items a. to c. above.

    The report goes on to say: For the purposes of calculating the maximum total cost to the Council only, the GMP also includes the Contractor’s fixed fee for assisting CST with the project scoping, design development and indicative costing processes already undertaken by Hawkins since November 2008 under a separate “Preferred Contractor Contract’.

    This could well be where your confusion has come from.

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