When a GMP (Guaranteed Maximum Price) is established before the design is 100% complete and specific materials are not yet chosen, the correct approach is to specify allowances in the project manual.

An allowance is a fixed monetary amount for a specific scope item (e.g., flooring finishes) that allows the contractor to carry a cost in the bid/GMP until the actual product is selected. This ensures the GMP covers the item without delaying pricing.

A. Contingency — Is for unforeseen conditions, not specific unselected finishes.

B. Schedule of unit prices — Typically used for variable-quantity work, not for unknown product selection.

D. Alternate — Provides an option for substitution, but does not guarantee a base cost in the GMP.

PDD Reference: ARE 5.0 PDD “Project Manual and Specifications—Allowances, Alternates, and Unit Prices,” AIA A201 §3.8, CSI Division 01—General Requirements.