The idea of speeding a project from initial proposal to finished building excites owners and motivates the financial projections. In reality though, fast-tracked projects are often the most difficult to accomplish and reconcile from a financial perspective, as the parties frequently lack the reference points needed to develop robust lump-sum contracts due to a lack of completed design.

To help manage the issues associated with moving a project from proposal through construction without a fully completed design, owners and contractors are increasingly turning to cost-plus-fee contracts as a project delivery method, most commonly with the addition of a guaranteed maximum price (GMP) to help manage costs. Cost-plus-fee contracts allow for project design and development within a flexible financial framework, while the addition of a GMP provides financial peace of mind to owners that they will not pay more than a stated amount (subject to agreed changes) for work on a project.¹