Guaranteed maximum price
A guaranteed maximum price contract is a cost-type contract such that the contractor is compensated for actual costs incurred plus a fixed fee, which is limited to a maximum price. The contractor is responsible for cost overruns greater than the guaranteed maximum price unless the GMP has been increased by a formal change order. Savings resulting from unexpectedly low costs are returned to the client.
This is different from a fixed-price contract, also known as stipulated price contract or lump-sum contract whereby cost savings are typically retained by the contractor and essentially become additional profits.