Two contractors can quote the same project and structure the price completely differently. The pricing model you agree to decides who carries the risk if costs move, and how much visibility you get into where the money goes. Here are the three you will run into on commercial work.
Lump sum (fixed price)
You and the contractor agree on a single price for a defined scope. It is simple and predictable, and it works best when the drawings are complete enough to price accurately. The contractor carries the risk if costs run over, and keeps the savings if they come in under, so the price usually includes some cushion for the unknowns. Changes to the scope become change orders.
Cost-plus
You pay the actual cost of the work (labor, materials, subcontractors) plus an agreed fee for the contractor, either a percentage or a fixed amount. It gives you full transparency into costs and works well when the scope is not fully defined yet. The tradeoff is less certainty on the final number, since there is no fixed ceiling unless you add one.
Guaranteed maximum price (GMP)
GMP is cost-plus with a cap. You get the transparency of cost-plus, but the contractor guarantees the project will not exceed a set maximum. If it comes in under, the savings are often shared. It is a common middle ground on larger commercial projects, balancing openness with a ceiling you can plan around.
Which one fits
Lump sum suits well-defined projects where you want price certainty. Cost-plus suits early or evolving scopes where transparency matters most. GMP suits projects where you want both a cap and visibility. None is automatically better; the right one depends on how defined the project is and how you want risk shared.
Why it matters who you work with
Whatever the structure, the price is only as good as the contractor standing behind it. Brothers B&B has worked as a commercial general contractor across the Dallas-Fort Worth Metroplex since 1993, and we will walk you through how a project is priced and which structure fits before the work starts. For more on the role itself, see what a commercial general contractor actually does, or reach our Fort Worth team. Get in touch or call (972) 264-1806.