A GMP is a cost-based contract where the contractor is paid a fixed price to manage the construction and a fixed percentage for overhead and profit, based on an agreed upon scope of work.
The contractor is responsible for cost overruns and must deliver the project at the agreed-upon budget, even if costs for labour and materials rise, as long as the original project scope is maintained.
PCL was hired to provide the GMP for the arena project, and was a member of the project team with the City of Edmonton, the Edmonton Arena Corporation, ICON Venue Group, 360 Architecture, and several local firms.
As the project team worked through the design, PCL provided advice on cost implications for different options, material and labour availability and scheduling. This allowed the project team to modify the design so that it was designed to meet the approved budget.
PCL also participated in value engineering workshops to identify design alternatives that would help the project stay within budget.
The GMP process differs from the traditional Design-Bid-Build process.
Under a Design-Bid-Build contract, once the design is complete, it is sent to construction firms, who provide a fixed price to build the design. That price may or may not be what was budgeted for the project as the design may include items that are more expensive than anticipated.
While a GMP does protect the City from cost increases due to things such as labour/material price changes, and cost overruns, a GMP contract does not include changes to the design made after the GMP is prepared.
There are contingency funds included in the $480 budget for the arena to absorb unanticipated design changes, and to address issues that arise during the project that could not have been foreseen at the time the GMP was set.