METHOD-RELATED CHARGES (MRC): THE COST

EFFECTS WHICH RELATED TO THE CLAIMS

BY

NORAZMI BIN FADILAH

A dissertation submitted in fulfilment of the requirement for

the degree of Master of Science in Quantity Surveying and

International Procurement

Kulliyyah of Architecture and Environmental Design

International Islamic University Malaysia

JULY 2018

ii

ABSTRACT

In construction projects, the Bill of Quantities (BQ) is used to provide a detailed

description of the total value of an item and serve as a normal payment mechanism for

work procured by the related parties, such as contractors. However, the Bill of

Quantities (BQ) has some essential flaws, the biggest of which being that construction

costs are rarely directly proportional to the quantity. The effect of this flaw may be

minimal if changes in the scope of the works are few, as the difference between the

contractor‟s costs and income will remain small. The concept of Method-related

Charges (MRC) will increase the change in scope that can be accommodated.

Nevertheless, friction often results when significant changes in scope or methods

occur, as the contractor struggles to justify any additional entitlement and to show

where his extra costs come from. This research aims to investigate the issues

pertaining to the Method-related Charges (MRC). The focus of the research is on how

to evaluate the cost effects of Method-related Charger (MRC) on construction and to

develop measures to minimize the impact of cost related issues raised under Method-

related Charges (MRC) claims. Another difficulty arises with Method-related Charges

(MRC) items, which is that the Civil Engineering Standard Method of Measurement

(CESMM) clause states that a Method-related Charges (MRC) does not bind the

contractor to use the method defined; it is not subject to admeasurement; and is not to

be increased or decreased for any change method adopted by the contractor. This

research uses an explanatory paradigm approach in exploring the issue by employing a

qualitative method. Data collection is comprised of interviews and document reviews

that aim to investigate the issue of Method-related Charges (MRC), to evaluate the

cost effects of Method-related Charges (MRC), and therefore to minimize the cost

related issues in the claim of Method-related Charges (MRC). Interviews were

conducted among construction practitioners and content analysis was used to analyse

the data collected. Validation of the findings from this research is achieved through

triangulation of interviews and document analysis. The findings from this research

found that Method-related Charges (MRC) enables the contractor optionally to enter

separately in the tender such non-quantity proportional charges as considered will

have a significant influence on the cost of the works and for which the contractor

omits to enter into Method-related Charges (MRC). The significant outcomes of this

research are expected to give a new perspective on the Method-related Charges

(MRC).

iii

البحث خلاصة

وتكون ،تقييم قيمة الوصف التفصيلي للبندل( BQ) الكميات فاتورة استخدام يتم البناء، مشاريع في قانون فإن ذلك، ومع. الدقاولين مثل العلاقة، ذات الأطراف قبل من شراؤه تم لعمل عادية دفع آلية بمثابة

مع طردياً تتناسب ما نادراً البناء يفتكال أن وأكبرىا الأساسية، العيوب بعض لديو( BQ) الكميات بين الفرق لأن قليلة، الأعمال نطاق في التغييرات كانت إذا ضئيلاً الخلل ىذا تأثير يكون وقد. الكمية

في التغيير( MRC) بالطريقة الصلة ذات الرسوم مفهوم سيزيد. ضئيلاً سيظل وإيراداتو الدتعهد تكاليف النطاق في كبيرة تغييرات حدوث عند غالبًا الاحتكاك يحدث ذلك، ومع. استيعابو يدكن الذي النطاق

يهدف. الإضافية تكاليفو مصدر ولإيضاح إضافي استحقاق أي لتبرير الدقاول يناضل حيث الطرق، أو البحث يركزو (. MRC) بالطريقة الصلة ذات بالرسوم الدتعلقة القضايا في التحقيق إلى البحث ىذا إجراءات ووضع الإنشاء، على( MRC) الصلة ذات الطرق لشواحن التكلفة آثار تقييم كيفية على بالطريقة الصلة ذات الرسوم مطالبات إطار في تثار التي بالتكاليف الصلة ذات القضايا تأثير من للحد

(MRC .)بالطرق الصلة ذات الرسوم بنود مع تنشأ أخرى صعوبة وىناك (MRC )، أن وىي بالطريقة الصلة ذات الشحنة أن على ينص( CESMM) للقياس ياسيالق الذندسي القياس شرط

(MRC )تخفيضها أو زيادتها ينبغي ولا. للقبول يخضع لاو المحددة؛ الطريقة باستخدام الدقاول تلزم لا استكشاف في توضيحية نموذجية مقاربة البحث ىذا يستخدم. الدقاول يعتمدىا تغيير طريقة لأي

الدستندات ومراجعات الدقابلات من البيانات جمع يتألفو . نوعية طريقة اماستخد خلال من الدشكلة للرسوم التكلفة آثار لتقييم ،(MRC) بالطرق الصلة ذات الرسوم مسألة في التحقيق إلى تهدف التي

الدطالبة في الأدنى الحد إلى بالتكلفة الدتعلقة الدشكلات لتقليل وبالتالي ،(MRC) بالطريقة الصلة ذات المحتوى تحليل استخدام وتم البناء ممارسي بين الدقابلات أجريتلقد (. MRC) بالطريقة الدتعلقة رسومال

الدقابلات تثليث خلال من البحث ىذا من النتائج من التحقق يتحقق. جمعها تم التي البيانات لتحليل الدقاول تدكن( MRC) بالطريقة الصلة ذات الرسوم أن البحث ىذا نتائج وأسفرت. الوثيقة وتحليل

موضح ىو كما الكمية غير النسبية الرسوم مثل الدناقصة في منفصل بشكل الدخول من اختياريا الصلة ذات الرسوم إلى الدخول الدقاول يحذفها والتي الأعمال تكلفة على كبير تأثير لذا سيكونو

ذات الرسوم على جديدة نظرة البحث لذذا الذامة النتائج تعطي أن الدتوقع من(. MRC) بالطريقة (.MRC) بالطريقة الصلة

iv

APPROVAL PAGE

I certify that I have supervised and read this study and that in my opinion, it conforms

to acceptable standards of scholarly presentation and is fully adequate, in scope and

quality, as a thesis for the degree of Master of Science in Quantity Surveying and

International Procurement

…………………………………..

Mohammad Saiful Nizam Mohd

Suhaimi

Supervisor

I certify that I have read this study and that in my opinion it conforms to acceptable

standards of scholarly presentation and is fully adequate, in scope and quality, as a

thesis for the degree of Master of Science in Quantity Surveying and International

Procurement

…………………………………..

Mohd Shariffuddin Ibrahim

Internal Examiner

This dissertation was submitted to the Department of Quantity Surveying and is

accepted as a fulfilment of the requirement for the degree of Master of Science in

Quantity Surveying and International Procurement

…………………………………..

Azrin Mohd Din

Head, Department of Quantity

Surveying

This dissertation was submitted to the Kulliyyah of Architecture and Environmental

Design and is accepted as a fulfilment of the requirement for the degree of Master of

Science in Quantity Surveying and International Procurement

…………………………………..

Abdul Razak Sapian

Dean, Kulliyyah of Architecture

and Environmental Design

v

DECLARATION

I hereby declare that this dissertation is the result of my own investigations, except

where otherwise stated. I also declare that it has not been previously or concurrently

submitted as a whole for any other degrees at IIUM or other institutions.

Norazmi bin Fadilah

Signature ........................................................... Date .........................................

vi

INTERNATIONAL ISLAMIC UNIVERSITY MALAYSIA

DECLARATION OF COPYRIGHT AND AFFIRMATION OF

FAIR USE OF UNPUBLISHED RESEARCH

METHOD-RELATED CHARGES (MRC): THE COST EFFECTS

WHICH RELATED TO THE CLAIMS

I declare that the copyright holders of this dissertation are jointly owned by the student

and IIUM.

Copyright © 2018 Norazmi bin Fadilah and International Islamic University Malaysia. All rights

reserved.

No part of this unpublished research may be reproduced, stored in a retrieval system,

or transmitted, in any form or by any means, electronic, mechanical, photocopying,

recording or otherwise without prior written permission of the copyright holder

except as provided below

1. Any material contained in or derived from this unpublished research may

be used by others in their writing with due acknowledgement.

2. IIUM or its library will have the right to make and transmit copies (print

or electronic) for institutional and academic purposes.

3. The IIUM library will have the right to make, store in a retrieved system

and supply copies of this unpublished research if requested by other

universities and research libraries.

By signing this form, I acknowledged that I have read and understand the IIUM

Intellectual Property Right and Commercialization policy.

Affirmed by Norazmi bin Fadilah

……..…………………….. ………………………..

Signature Date

vii

This dissertation is dedicated to my beloved parents and my brothers and sisters and

to my wife and my daughter’s Nur Qistina binti Norazmi.

viii

ACKNOWLEDGEMENTS

All praises to the almighty Allah S.W.T, the most gracious and merciful for

granting me with strength, courage and passion to believe in this pursuit.

My foremost gratitude goes to my principal supervisor, Dr Mohamad Saiful

Nizam Bin Mohd Suhaimi for his never-ending guidance, motivation, enthusiasm and

optimism towards my MSc Quantity Surveying and International Procurement

dissertation work in Kulliyah of Architecture and Environmental Design (KAED) under

the Department of Quantity Surveying, International Islamic University Malaysia (IIUM).

Dr Mohamad Saiful Nizam Bin Mohd Suhaimi, he is a lifetime mentor and advisor.

To my fellow colleagues from Malaysian Polytechnic and friends whom we have

been through during the ups and down, I do owe you all an appreciation. You were there

when I was dejected and keep me on track. It‟s a precious friendship.

To my parents, Fadilah bin Sulaiman and Norhazah binti Nordin, brothers and

sisters your positivity and support throughout my study are priceless. Thank you for your

love and trust.

To my wife and my daughter (My Stardust), Nor Ashida binti Sinin and Nur

Qistina binti Norazmi, your sacrifices along these years are priceless. Thank you for the

support, kindness and care.

ix

TABLE OF CONTENTS

Abstract .................................................................................................................... ii

Abstract in Arabic .................................................................................................... iii Approval Page .......................................................................................................... iv

Declaration ............................................................................................................... v Copyright Page ......................................................................................................... vi Acknowledgements .................................................................................................. viii List of Tables ........................................................................................................... xiii List of Figures .......................................................................................................... xiv

List of Abbreviation………………………………………………………………..xv

CHAPTER ONE: INTRODUCTION ................................................................. 1 1.1 Background of the Study ........................................................................ 1 1.2 Research Problem ................................................................................... 3 1.3 Research Questions ................................................................................. 5 1.4 Research Objectives................................................................................ 6

1.5 Limitation of the Study ........................................................................... 6 1.6 Significance of the Study ........................................................................ 6

1.7 Research Network ................................................................................... 7 1.8 Summary ................................................................................................. 8

CHAPTER TWO: LITERATURE REVIEW .................................................... 10 2.1 Introduction............................................................................................. 10

2.2 Definition of Method-related Charges (MRC) ....................................... 11

2.3 The Philosophy of Methoed-related Charges (MRC) ............................. 12

2.4 The Objectives of Method-related Charges (MRC) ............................... 13 2.5 The Purpose of Method-related Charges (MRC).................................... 14

2.6 The Types of Method-related Charges (MRC) ....................................... 16

2.6.1 Time Related Charges ................................................................... 17

2.6.2 Fixed Charges ............................................................................... 17 2.7 The Implication of Method-related Charges (MRC) .............................. 18 2.8 The Advantages and Disadvantages of Method-related Charges

(MRC) ..................................................................................................... 19

2.9 The Application of Method-related Charges (MRC).............................. 20

2.10 Method-related Charges (MRC) Mechanism ....................................... 21

2.11 Claims ................................................................................................... 22

2.12 Definitions of Claims ............................................................................ 22

2.13 Construction Claims ............................................................................. 23

2.14 Types of Claims .................................................................................... 25

2.14.1 Contractual Claims ...................................................................... 25

2.14.2 Extra Contractual CLaims ........................................................... 26

2.14.3 Quantum Merit Claims................................................................ 26

2.14.4 Ex-Gratia Claims......................................................................... 26

2.14.5 Counter Claims ........................................................................... 26

2.15 Reasons for Claims ............................................................................... 27

2.16 Issues of Claims .................................................................................... 29

x

CHAPTER TWO: LITERATURE REVIEW 2.17 Causes of Claims .................................................................................. 30

2.17.1 Payment Related Claims ............................................................. 31

2.17.2 Change Claims ............................................................................ 31

2.17.3 Delay Claims ............................................................................... 32

2.17.4 Extra Works and Claims ............................................................. 32

2.17.5 Contractual Claims ...................................................................... 33

2.17.6 Difference in Pricing & Measuring Claims ................................ 33

2.17.7 Different Site Condition Claims ................................................. 33

2.17.8 Acceleration Claims .................................................................... 34

2.17.9 Damage Claims ........................................................................... 34

2.17.10 Contract Termination Claims .................................................... 34

2.18 Summary ............................................................................................... 35

CHAPTER THREE: RESEARCH METHODOLOGY ................................... 36 3.1 Introduction............................................................................................. 36 3.2 Definition of Research ............................................................................ 36 3.3 The Types of Research (Research Design) ............................................. 37 3.4 Steps of the Research Process ................................................................ 37

3.5 Research Methodology ........................................................................... 38 3.5.1 Purpose Research .......................................................................... 41

3.5.2 Qualitative Research Methodology ............................................... 42 3.6 Research Process .................................................................................... 43

3.6.1 Overview of the Research Process ................................................ 43

3.6.2 Literature Review .......................................................................... 44

3.7 Research Method .................................................................................... 45

3.8 Data Collection ....................................................................................... 46

3.8.1 Interview ....................................................................................... 47

3.8.1.1 Semi-Structured Interview ................................................ 48

3.8.1.2 Selection of Interview Method ......................................... 49

3.8.1.3 Reason for Selecting Focused Interview (Semi-

Structured) .................................................................................... 50

3.8.1.4 Selecting Interview Respondents ...................................... 51

3.8.1.5 Interview Approach .......................................................... 51

3.8.1.6 Interview Plan ................................................................... 52

3.8.1.7 Developing Interview Question ........................................ 56

3.8.1.8 Recording Interview ......................................................... 58

3.9 Data Analysis .......................................................................................... 59 3.10 Report Writing ...................................................................................... 60 3.11 Summary ............................................................................................... 60

CHAPTER FOUR: DATA ANALYSIS AND FINDINGS ................................ 62 4.1 Introduction............................................................................................. 62 4.2 Analysis .................................................................................................. 62

4.3 Responsde Rate ....................................................................................... 64 4.4 Interviewee‟s Profile ............................................................................... 65 4.5 Theme Generated/Data Index ................................................................. 67

4.5.1 Theme Relationship with Research Question ................................ 69

xi

CHAPTER FOUR: DATA ANALYSIS AND FINDINGS 4.6 Theme Exploration ................................................................................. 70

4.6.1 MRC01 Expenses .......................................................................... 72

4.6.2 MRC06 Bidder Own Approach .................................................... 73 4.6.3 MRC08 Underestimated ............................................................... 74 4.6.4 MRC01 Examples ......................................................................... 75 4.6.5 MRC09 Cost Sensitive .................................................................. 76 4.6.6 MRC12 Fair in Contract Management.......................................... 77

4.6.7 MRC14 Cover for Related Cost .................................................... 78 4.6.8 MRC18 Progress Claim ................................................................ 79

4.6.9 MRC21 Justify during Tender Evaluation & Scrutinise ............... 80

4.6.10 MRC22 Ask for Justification during Tender Evaluation ............ 81

4.7 Triangulation of Results ......................................................................... 84

4.7.1 Expenses Attributes....................................................................... 85

4.7.2 Bidder Own Appraoch Attributes ................................................. 86

4.7.3 Underestimated Attributes ............................................................ 87 4.7.4 Examples Attributes ...................................................................... 88 4.7.5 Cost Sensitive Attributes ............................................................... 89 4.7.6 Fair in Contract Management Attributes ...................................... 90

4.7.7 Cover for Related Cost Attributes ................................................. 91 4.7.8 Progress Claim Attributes ............................................................. 92

4.7.9 Justify during Tender Evaluation & Scrutinise Attributes ............ 92 4.7.10 Ask for Justification during Tender Evaluation .......................... 94

4.8 Summary ................................................................................................. 95

CHAPTER FIVE: DISCUSSION AND CONCLUSION .................................. 97 5.1 Introduction............................................................................................. 97

5.2 Conclusion from the Research Question ................................................ 98

5.2.1What are cost related issues concerning Method-related

Charges (MRC) in the Bill of Quantities (BQ) ............................. 99

5.2.2What are the impact/effect of the cost related issues (Claim)

stemming from Method-related Charges (MRC) application in

Bill of Quantities (BQ) ................................................................. 100

5.2.3What are the setback of Method-related Charges (MRC)

application in Bill og Quantities (BQ) .......................................... 101

5.2.4What are strategies to improve cost related claim corcerning

Method-related Charges (MRC) ................................................... 102

5.3 Conclusion from Objective Achievements ............................................. 103

5.3.1Research Objective 1 ..................................................................... 103

5.3.2Research Objective 2 ..................................................................... 105

5.3.3Research Objective 3 ..................................................................... 106

5.4 Research Limitation ................................................................................ 107 5.5 Recommendation for Future Research ................................................... 108 5.6 Summary ................................................................................................. 109

xii

REFERENCES ....................................................................................................... 110

APPENDIX A: INTERVIEW QUESTION ..................................................... 115 APPENDIX B: INTERVIEW ANSWERS (EACH OF THE

PARTICIPANTS) .................................................................... 116

xiii

LIST OF TABLES

‎Table 3.1 Types of Research 45

‎Table 3.2 Variety of Qualitative Interview Types 49

Table 4.1 Participants for an Interview Session 64

‎Table 4.2 Interviewee‟s Profile Registry 66

‎Table 4.3 Themes Generated from Interview Transcripts 67

‎Table 4.4 Top ten (10) related Themes 68

‎Table 4.5 MRC01 Expenses 73

‎Table 4.6 MRC06 Bidder Own Approach 74

‎Table 4.7 MRC08 Underestimated 75

‎Table 4.8 MRC01 Examples 76

‎Table 4.9 MRC09 Cost Sensitive 77

‎Table 4.10 MRC12 Fair in Contract Management 78

‎Table 4.11 MRC14 Cover for Related Cost 79

‎Table 4.12 MRC18 Progress Claim 80

‎Table 4.13 MRC21 Justify during Tender Evaluation & Scrutinise 81

‎Table 4.14 MRC22 Ask for Justification during Tender Evaluation 82

xiv

LIST OF FIGURES

‎Figure 3.1 The Research Spiral 38

‎Figure 3.2 Research Flow Chart 40

Figure 3.3 Interview Plan 52

‎Figure 4.1 Themes Relationship with Research Objectives 83

xv

LIST OF ABBREVIATION

BQ Bills of Quantities

CESMM Civil Engineering Standard Method of Measurement

CIDB Construction Industry Development Board Malaysia

MRC Method-related Charges

MyCESMM Malaysian Civil Engineering Standard Method of Measurement

PWD Public Work Department

TRC Time-related Charge

FC Fixed Charge

1

CHAPTER ONE

INTRODUCTION

1.1 BACKGROUND OF THE STUDY

The construction industry is among the industry that is listed as a major contributor to

the development of country's economy. The importance of the construction industry

can be seen clearly through the involvement of the various industries and covers a

wide range of fields. This activities include in various sectors of the construction

industry (i.e.; residential, industrial, commercial, the market is, etc.) and it is not

restrained to the construction phase but also the phases of pre-construction and post-

construction.

According to the Construction Industry Development Board Malaysia Act 520,

said the construction industry is an industry that involve in construction, installation,

repair, maintenance, renewal, transfer, modify, change, dismantle or demolish (CIDB,

2004). The construction sector also comprise of planning, design, construction,

changes, maintenance, repair and removal of various types of civil engineering works,

structures mechanical, electrical, and other similar work. Therefore this industry

includes (Ofori, 1990):

i. Companies and agencies (public and private) involved in physical

construction.

ii. Provision of planning, design, coordination and management services in

relation to construction.

2

The construction sector has also been recognized as one of the important

sectors that can generate economic growth countries. The construction sector is also

one of the sectors that are capable to stimulate economic growth when the country is

facing a crisis of recession (Saidin, Zakaria and Ahmadon, 2006).

Through physically, construction industry output is expansive, overwhelming

and costly and may not be exchanged or moved. It remains in one area and including

the utilizing of distinctive materials and building components created by

manufacturing industries. The output are comprises of development of different sorts

of buildings, civil engineering which include the infrastructure works. In the

construction industry, civil engineering works have a greater scope of the building.

The construction of civil engineering works has been practiced since time immemorial

for the supply of infrastructure or infrastructure to other industries. The civil

engineering history has begun with a defective international history such as the

construction of the pyramids, canals, tunnels, highways, dams, railway networks,

supply pipes water, pipes for oil and gas and other shows that the importance of the

civil engineering sector in construction industry.

Therefore it is vital to create a substantial degree of standardization in the

method of preparing the Bill of Quantities (BQ) and the units used in them, especially

the used of Method-related Charges (MRC) by a tenderer. A tenderer could insert in

the Bill of Quantities (BQ) such items for Method-related Charges (MRC) as he may

decide to cover the items of work which is relating to his intended method of finishing

the works. Method-related Charges (MRC) only applies in the Civil Engineering

works or condition when a projects using the Malaysian Civil Engineering Standard

Method of Measurement (MyCESMM) for Malaysia construction industry or Civil

3

Engineering Standard Method of Measurement (CESMM) for United Kingdom

construction industry. For that reason, the used of Method of Measurement

(MyCESMM) or Civil Engineering Standard Method of Measurement (CESMM) only

covers a wide range of civil engineering works which include roads, railways, bridges,

docks and apart from that, it is also includes the structural engineering projects such as

iron work, reinforced concrete work, stone work, woodworking and brick work

(Saidin, Zakarian and Ahmadon, 2006).

1.2 RESEARCH PROBLEM

Construction projects are priced using a Bill of Quantities (BQ) a detailed description

of the items needed to finish the product and their costs. Bills of Quantities (BQ) are

an ordinary fee instrument for work obtained beneath the traditional/sequential

procurement method, where the works are significantly outlined by the employer

before being put out to tender by a contractor. In any case, Bills of Quantities (BQ)

have a few crucial imperfections, the greatest being that development costs are once in

a while specifically corresponding to amount. The impact of this imperfection may be

negligible in case changes within the scope of the works are few as the contrast

between the contractor‟s costs and wage will stay little. The concept of Method-

related Charges (MRC) increases the change in scope that can be accommodated.

Hence, Civil Engineering Standard Method of Measurement (CESMM) will be used

as a reference for the concept of Method-related Charges (MRC). In the article

“Prowriterslanka – Civil Engineering Works” (2013), it is mentioned that it is quite

difficult to analyse Method-related Charges (MRC) on tender analysis reports, due to

different methods/approaches by different tenderers in general items. Therefore, it can

4

create discrepancies on the Bill of Quantities (BQ) rates especially on the pricing

aspects and claims for the contractor.

Nevertheless, friction often results when significant changes in scope or

methods occur, as the contractor struggles to justify any additional entitlement and to

show where his extra costs come from. The situation is not helped by the lack of

programming provisions in traditional conditions of contract. The concept of payment

for temporary works as set out in Civil Engineering Standard Method of Measurement

(CESMM) can be called into question, as it creates potential ambiguities. The

engineer may choose not to itemize any temporary works under „specified

requirements‟ because he leaves such works for the contractor to decide. But the

contractor may maintain that the list of temporary works (such as traffic diversion,

access roads and de-watering) entitles him to payment for those works on the same

principles as – when an item which Civil Engineering Standard Method of

Measurement (CESMM) lists for measurement is found missing – the item has to be

added to a bill. To avoid this ambiguity the preamble to the bill should state that Class

A items shall be measured only to the extent they are included in the contract at the

time of the award; thus fixing the temporary work items measured.

Another difficulty arises with Method-related Charges (MRC) items, Civil

Engineering Standard Method of Measurement (CESMM) clause state that a Method-

related Charges (MRC) does not bind the contractor to use the method defined; is not

subject to admeasurement; and is not to be increased or decreased for any change

method adopted by the contractor (Coinloorke, 2012). But when the engineer orders a

variation of some permanent work, the contractor may claim that bill rates for similar

work do not apply, because the temporary works associated with that work have

5

changed but the method related item of charge remains fixed. Despite the Bills of

Quantities (BQ) become so successful in saving duplication of efforts while tendering

and basis for valuing works as work proceeds, in some circumstances, it is consider as

difficult to analyse Method-related Charges (MRC) on the tender analysis reports. It is

because of different methods/approaches by different tenderers in general items. As a

result this can raise debatable issues concerning Method-related Charges (MRC).

1.3 RESEARCH QUESTION

The Research questions of this research are as follow:

• What are costs related issues concerning Method-related Charges (MRC) in the

Bills of Quantities (BQ)?

• What are the impact/effect of the cost related issues (claim) stemming from

Method-related Charges (MRC) application in Bills of Quantities (BQ)?

• What are the setbacks of Method-related Charges (MRC) application in Bills

of Quantities (BQ)?

• What are the strategies to improve cost-related claim concerning Method-

related Charges (MRC)?

6

1.4 RESEARCH OBJECTIVES

The objectives of this research are:

i. To investigate issues on the Method-related Chargers (MRC).

ii. To evaluate the cost effects of Method-related Chargers (MRC) on

construction.

iii. To develop measures to minimize the cost related issues raise in the

claim of Method-related Chargers (MRC).

1.5 LIMITATION OF STUDY

This study will be focusing on Method-related Charges (MRC) in the construction

industry only. This report will be aimed at the construction professionals in the

Malaysia construction industry. The main focus of this study is related to the Method-

related Charges (MRC) in Malaysia. Therefore, Civil Engineering Standard Method of

Measurement (CESMM) will be used as the references in the Malaysia construction

industry especially related to the civil engineering projects.

1.6 SIGNIFICANCE OF THE STUDY

This research is mainly intended to be a reference for parties within the construction

industry and others who may benefits from it. It provides information with regards to

the Method-related Charges (MRC). The research eventually is expected to provide an

info regarding to the cost effects of Method-related Charges (MRC) and minimizing

the cost related issues in the claim of Method-related Charges (MRC).

7

In addition, it aims to enhance their knowledge pertaining to the civil

engineering works. Therefore, various circumstances will be studied by looking into

the cost effects and minimize the cost related to the Method-related Charges (MRC).

By understanding these, the contractors may be able to recognize the

importance of Method-related Charges (MRC) and create awareness among the

tenderers. These would be beneficial to the civil engineering works and creates

opportunity to the contractor to manage the cost in a better way. Therefore, Method-

related Charges (MRC) could be a strategy to manage by the contractor works and

minimizing the cost related which affected the Method-related Charges (MRC).

1.7 RESEARCH FRAMEWORK

This research is comprised of five (5) chapters, where the brief description of each

chapter is provided as follows:

a) Chapter 1 - Introduction

This chapter consists of the background of study for the research, the objective

of study, limitation of study and the framework of the report.

b) Chapter 2 – Literature Review

In this chapter, the Method-related Charges (MRC) will be reviewed. Apart

from that, a study of steps to be taken and challenges to be faced by the

contractors towards Method-related Charges (MRC) also included in this

chapter.

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c) Chapter 3 – Research Methodology

This chapter is the primary step in initiating this research is by identifying the

research issue. This was motivated by reading materials such as articles,

journals and books. With the issue identified, the objective of study was then

established i.e. the barriers including the challenges of using Method-related

Charges (MRC) for the contractors.

d) Chapter 4 – Results and Analysis

This chapter analyses the results of the Method-related Charges (MRC), the

issues on the Method-related Charges (MRC), evaluate the cost effects of

Method-related Charges (MRC) and develop measures to minimize the cost

related issues raise in the claims of Method-related Charges (MRC).

e) Chapter 5 – Discussion and Conclusion

This chapter summarizes and concludes the findings, as well as making

recommendations for the potential further research.

1.8 SUMMARY

This chapter aims to give an overall view of the research topic. It provides the readers

with the:

General view on the research topic

Brief description on the research problems

The research question

The objectives of the research

The limit of the study

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The significance of the study

The framework of the research

The subsequent chapters will be narrowing to the general matters on the

Method-related Charges (MRC). Therefore on the next chapter, the author will

concentrate towards the Method-related Charges (MRC) in civil engineering works

and claims regarding to the Method-related Charged (MRC).