Which of the following is NOT a contracting approach?

• A. Fixed Price
• B. GMP
• C. Cost Reimbursement
• D. Low Price

Answer: (D)

The key idea is distinguishing how price is established and risk is allocated in a design-build contract from how a bidder is selected. Fixed price, cost reimbursement, and a guaranteed maximum price are contract forms that define the payment method and allocate risk between the owner and the design-builder. A fixed-price (lump-sum) contract sets a single price for the complete scope, pushing cost risk to the contractor. Cost reimbursement pays actual costs plus a fee, shifting more cost risk to the owner but providing flexibility for uncertain or evolving scopes. A GMP sets a maximum price that caps cost while allowing incentives for cost control and efficiency.

Low Price, however, is not a contract form. It’s a bid selection approach—choosing the winning proposer based on the lowest bid. While it drives price competition, it does not specify how price is set or how risk is shared in the project, which is why it’s not considered a contracting approach. In practice, relying on the lowest price alone can lead to gaps in scope, quality, or risk management, which is why DBIA emphasizes contract forms that clearly define price mechanisms and risk.