What role does a Construction Manager typically perform in project cost management?

A Construction Manager plays a critical role in project cost management by overseeing change orders throughout the construction process. Change orders are formal amendments to the original construction contract that modify the scope of work, schedule, or costs. As projects often encounter unforeseen circumstances or changes in requirements, the Construction Manager is responsible for evaluating these changes, assessing their impact on the project budget, and directing the necessary adjustments to maintain financial control.

By overseeing change orders, the Construction Manager ensures that any additional costs incurred as a result of modifications are justified and documented properly. This responsibility helps in tracking project expenses against the budget and is essential for maintaining fiscal accountability. This role is vital in minimizing the risk of budget overruns and fostering effective communication among stakeholders regarding financial implications.

In contrast, while compliance with local laws, preparing annual financial statements, and negotiating contractor agreements are important aspects of construction management and finance, they do not focus specifically on the active management of costs during the project. Compliance checks mainly address safety and regulatory issues, financial statements pertain to overall financial health rather than project-specific costs, and contractor negotiations usually occur before the work starts rather than during the management of ongoing project budgets.