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

Wai Ming Chan, Tsun Ip Lam, Ping Chuen Chan, James M.W. Wong

Research output: Journal article publicationJournal articleAcademic researchpeer-review

3 Citations (Scopus)

Abstract

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.
Original languageEnglish
Pages (from-to)188-205
Number of pages18
JournalEngineering, Construction and Architectural Management
Volume18
Issue number2
DOIs
Publication statusPublished - 14 Mar 2011

Keywords

  • Hong Kong
  • Incentive schemes
  • Procurement

ASJC Scopus subject areas

  • Civil and Structural Engineering
  • Architecture
  • Building and Construction
  • Business, Management and Accounting(all)

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