NRM: an updated suite in the works

The revised New Rules of Measurement suite will respond to industry feedback and be integrated into all new and updated RICS publications and industry standards

Author: Steven Thompson

23 February 2020

RICS is in the process of updating the three volumes in its New Rules of Measurement (NRM) suite. The suite provides a standard set of measurement rules and essential guidance for the cost management of construction projects and maintenance works. It is designed to be understandable for anyone involved in a construction project and covers the whole life cycle of the cost management process for the construction, maintenance, repair and renewal of built assets.

Although NRM is largely based on UK practice, the requirements for a coordinated set of rules and underlying philosophy behind each volume can apply globally.

The suite comprises of the following three volumes.

  • 'NRM 1: Order of cost estimating and elemental cost planning for capital building works', allowing a consistent approach when considering the capital cost of a construction project
  • 'NRM 2: Detailed measurement for building work', dealing with the components required to produce bills of quantities, or similar pricing documents
  • 'NRM 3: Order of cost estimating and elemental cost planning for building maintenance works', allowing a consistent approach when considering the costs incurred throughout the life cycle of a construction project.

The suite was first published in 2012 – effective from 1 January 2013 – although NRM 1 had previously been launched as a stand-alone document in 2009.

A more unified approach

The main revisions to the suite will be made to NRM 1 and NRM 3 to ensure they are still fit for purpose and better align with other industry publications. The aim is for a seamless integration of NRM into all new and updated RICS standards and publications, and other industry documents.

The second edition of the International Construction Measurement Standards (ICMS 2) was published in September 2019 and includes a new method for the classification of costs for construction works and associated costs in an internationally agreed format. This means that ICMS 2 enable direct cost comparisons between projects in different parts of the world, irrespective of whether estimates and cost plans have been prepared in accordance with NRM 1 or the measurement rules used by another country or area.

ICMS 2 take into account the cost classification of the life-cycle costs of the asset: the initial capital costs plus the renewal, operation, maintenance and end-of-life costs. The base cost classification arrangement for the initial capital costs can be used in conjunction with NRM 1, and the whole life-cycle cost arrangement can be used in conjunction with NRM 3. Both NRM 1 and NRM 3 will be mapped to ICMS 2. The forthcoming RICS professional statement on cost prediction will provide the first definitive global statement of the processes and procedures a surveyor must follow when reporting to a client on cost estimating and cost planning. The professional statement will apply the rules and classification systems used in NRM 1 NRM 3 and ICMS 2.

The second edition of the RICS professional statement Property measurement incorporates the International Property Measurement Standards (IPMS). This professional statement has been published and updated over the past few years as further property types, such as offices, retail and residential have been added to the IPMS system. It provides a global definition and guidance on how property measurement is to be approached and is aligned with the categories included in ICMS 2, NRM 1 and NRM 3.

At the time of writing, the Royal Institute of British Architects (RIBA) is revising their Plan of Work (PoW). The 2020 PoW will update the industry-standard plan, setting out the various stages in the life cycle of a project, as mapped to the relevant functions and activities. Given that this updated PoW will take a wider view of the various procurement routes available to a client, the cost estimating and cost planning stages that are covered in NRM 1, and NRM 3 will be refined to align more closely with the RIBA PoW 2020.

Some tweaks will also be made to NRM 2 as a result of feedback gathered from users since the publication of the first edition of the volume. An example of this feedback is the suggestion that it would be sensible to change the risk profile. We therefore propose changing the way that some items should be measured, particularly the measurement of earthwork support and working space.

The current edition of NRM advises that this is only measured if the contract administrator instructs that it should be, which shifts the risk to the contractor.

A revision to advise that earthwork support is always measured, irrespective of whether it is thought to be necessary or not, will take much of the risk away from the contractor. Contractors will then be free to include or not include a commercial rate for the work dependent on any relevant commercial considerations.

Wider review of NRM 2

RICS is aware that, over the years, the use of bills of quantities has diminished, mostly due to changes in procurement strategy and forms of contracts. We are also aware that when bills of quantities are prepared, the use of NRM 2 has been modest. There appears to be a clear divide in the users of NRM 2. In general, when clients' consultants are preparing bills of quantities for the procurement of the main contractor, they are using Standard Method of Measurement (SMM) 7 and not NRM 2. SMM 7 was published by RICS in 1988 and superseded by NRM 2.

"RICS is making a conscious effort to better understand the reasons for the limited take-up of NRM 2 and the continued use of SMM 7"

When main contractors are preparing trade package bills of quantities for the procurement of subcontractors, however, they are often using NRM 2 but adapting and amending it to suit their own purposes, incorporating elements from SMM 7 when applicable.

RICS is making a conscious effort to better understand the reasons behind the limited take-up of NRM 2, and the continued use of SMM 7.

Although we will benefit from feedback from users during the consultation process before the launch of the new edition of NRM, we believe a wider piece of research is needed to ensure that we are reflecting the needs of the market. The 2020 edition of NRM 2 will subsequently be revised to reflect the results of this research.

Updating the NRM suite and undertaking research as to how it can better suit the market is another step in ensuring RICS standards are relevant and useful to as many of our professionals as possible.

Steven Thompson is associate director of the built environment at RICS

Related competencies include: Quantification and costing (of construction works)

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