In an agency CM arrangement, the CM's financial responsibility is limited to what?

• A. The Total Project Budget
• B. The Owner’s Equity
• C. The Scope of Services and the Fee Agreed Upon Between the Owner and the CM
• D. The Contractor’s Fee

Answer: (C)

In an agency CM arrangement, the construction manager acts as the owner’s agent and advisor, not as the constructor. Their financial exposure is defined by the contract with the owner: they are responsible only for the scope of services and the fee that the owner has agreed upon. The CM isn’t financially responsible for the total project budget, the owner’s equity, or the contractor’s fee. Their compensation is a set fee (plus any pre-approved reimbursable costs), so the liability is capped by what’s in that agreement. This setup keeps budgeting and risk with the owner and the contractor, while the CM focuses on planning, coordination, and oversight within the agreed terms.