Guaranteed maximum price (GMP) contracts in practice: A case study of a private office development project in Hong Kong

Purpose-This paper aims to investigate the operational mechanism, project performance, motives behind, benefits, difficulties and success factors of adopting the guaranteed maximum price (GMP) scheme based on a real-life case study of Chater House, an international Grade A private office project in Hong Kong. Design/methodology/approach-The case project was analysed by means of the related project documentation and a series of face-to-face interviews with the relevant senior project representatives. Findings-All the interviewed key project stakeholders perceived that the GMP contract helped achieve competitive price, value for money and superior quality of products as well as provided stronger incentives to innovation and cost saving. The case study revealed that the overall success of this GMP project was underpinned by several key attributes. Originality/value-The paper provides solid groundwork for client bodies and contracting organisations to develop a best practice framework for implementing successful GMP schemes in future construction.