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Week 10
Method-Related Charges

KIA3004
Construction Management
& Technology
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Lecturer Info

Ts. Dr. Saznizam Sazmee Sinoh

saznizam@um.edu.my
Room G112 (Block G, Level 1)
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Course Outcomes
Continuous
No. CLO Exam
Assessment

Apply the contract strategy in selecting the best type of construction

1 17.5% 5%
contract to suit the type of construction
Manage the tendering process in the construction contract
2 administration and documentation, prepare contract evaluation and 17.5% 10%
variation and to make valid civil engineering claims
Apply the operational cost estimating technique and organize risk
3 appraisal for small projects incorporating the method-related - 15%
charges.
Apply the project planning technique and the Critical Path Method
4 (CPM) for construction project and theory of construction materials 35% -
and plant management.
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Introduction
How much to charge for 1 packet of nasi lemak?

1 cup Rice RM1.00

1 Egg RM1.00
1 spoon Sambal RM0.50
1 spoon Anchovies RM0.20
5 slices Cucumber RM0.30

TOTAL RM3.00
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How much to charge

for other stuff?

Cooking RM ?
Packaging RM ?
Transport RM ?
Marketing
RM ?
More importantly, how can
we QUANTIFY these?
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These are quantity-based

1 cup Rice RM1.00 Cooking RM ?

1 Egg RM1.00 Packaging RM ?
1 spoon Sambal RM0.50 Transport RM ?
1 spoon Anchovies RM0.20 Marketing
5 slices Cucumber RM0.30 RM ?

These are method-based

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Cooking RM ?
Packaging RM ?
Transport RM ?
Marketing
RM ?

Thus, we can say they are

METHOD-RELATED
CHARGES
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Method-Related Charges
Definition:

An item in BoQ which covers activities relating

to the intended method of executing the
construction Works.

• Inserted into the BoQ by the contractor

• Is not directly related to quantity of work done
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Engineer Expert in DESIGN

Contractor Expert in
CONSTRUCTION
METHODS
• Contractor has the final say to determine the method to
carry out the Works
• QS and Engineers may estimate the quantity of
materials required and the contractor will
supplement the BoQ with how much it costs to carry
out construction activities
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CESMM3 & CESMM4 have over 40 items to include in the BoQ such
as
• Accommodation (offices, stores, canteen, etc.)
• Services (water, power, site transport, welfare, etc.)
• Plant and temporary works of many kinds
• Supervision and labour
• Contractor may also include items not listed in
CESMM
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Method-Related Charges are divided into 2 basic types:

(But both are priced as LUMP SUMS in the BoQ)

Time-Related Charges Fixed Charges

Payments spread out over Paid upon completion of
time to complete Item Items
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Example of commonly
included method related
charges
Observe the distinction
between fixed and time-
related charges

Why is item A330.2 wrong?

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Method-Related Charges typically go

under Class A in CESMM3/4
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Advantages of Method-Related Charges

• Reduce likelihood of claims

• BoQ can adapt better to variations and changes
• Contractor receives more equitable payment for
work done
• Better early cash flow especially to contractor
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Next Lecture

Cost-Estimation and Risk Appraisal