In the realm of construction cost management, precise measurement and accurate estimation of costs are crucial for project success. The New Rules of Measurement (NRM) provide standardized guidelines for these processes, ensuring consistency and reliability in cost planning and control. The Royal Institution of Chartered Surveyors (RICS) developed the NRM suite, which includes NRM1 and NRM2. While both are essential for cost management, they serve different purposes and are applied at different stages of a construction project. This article explores the differences between NRM1 and NRM2, highlighting their unique features and applications.
What is NRM1?
NRM1, titled “Order of Cost Estimating and Cost Planning for Capital Building Works,” focuses on the early stages of a construction project. It provides guidelines for preparing order of cost estimates and cost plans during the initial design phases. The primary aim of NRM1 is to offer a systematic approach to estimating and controlling costs, ensuring that projects remain within budget from inception through the design stages.
Key Features of NRM1
- Order of Cost Estimates:
- NRM1 outlines the methodology for producing initial cost estimates based on preliminary designs. These estimates provide an early indication of the likely costs, helping stakeholders make informed decisions about project feasibility.
- Cost Planning:
- The guidelines cover cost planning processes, including the development of detailed cost plans. These cost plans are refined as the design evolves, ensuring that the project remains financially viable and that funds are allocated efficiently.
- Elemental Cost Breakdown:
- NRM1 emphasizes an elemental cost breakdown, dividing the project into various elements such as substructure, superstructure, finishes, fittings, and services. This approach facilitates detailed analysis and monitoring of costs associated with each component.
- Standardization:
- By providing standardized rules and definitions, NRM1 promotes consistency in cost estimating and planning. This standardization is essential for comparing costs across different projects and ensuring transparency in cost reporting.
- Flexibility:
- NRM1 is designed to be flexible, accommodating different types of building projects and varying levels of design detail. It allows for adjustments and updates as the project progresses, maintaining accuracy in cost estimates and plans.
What is NRM2?
NRM2, titled “Detailed Measurement for Building Works,” is intended for the later stages of a construction project. It provides comprehensive guidance on detailed measurement, which is essential for preparing bills of quantities and ensuring precise cost control during the construction phase. NRM2 focuses on the quantification of construction works, facilitating accurate pricing and contract administration.
Key Features of NRM2
- Detailed Measurement:
- NRM2 outlines the procedures for detailed measurement of building works, ensuring that all quantities are accurately quantified. This detailed measurement is crucial for preparing bills of quantities, which serve as the basis for tendering and contracting.
- Bills of Quantities:
- The guidelines provide a structured approach to preparing bills of quantities. These documents itemize all the materials, labor, and services required for the construction project, enabling contractors to submit precise and competitive bids.
- Measurement Rules:
- NRM2 includes specific measurement rules for different types of construction work. These rules ensure consistency in the way quantities are measured and reported, reducing the risk of discrepancies and disputes.
- Cost Control:
- By providing detailed measurements and accurate quantities, NRM2 facilitates effective cost control during the construction phase. It allows for precise tracking of costs, helping to identify and address any variations or cost overruns promptly.
- Contract Administration:
- NRM2 supports contract administration by providing clear guidelines for quantifying and valuing variations, extensions of time, and other contract-related issues. This clarity is essential for maintaining transparency and fairness in contractual relationships.
Key Differences Between NRM1 and NRM2
While NRM1 and NRM2 are both integral to construction cost management, they serve distinct purposes and are applied at different stages of a project. Here are the key differences between the two:
- Stage of Application:
- NRM1 is used during the early design stages for cost estimating and planning, while NRM2 is applied during the construction phase for detailed measurement and preparation of bills of quantities.
- Focus:
- NRM1 focuses on order of cost estimates and cost plans, providing a broad overview of project costs. In contrast, NRM2 concentrates on detailed measurement and quantification of building works, ensuring precise pricing and cost control.
- Level of Detail:
- NRM1 provides guidelines for developing cost plans at various levels of design detail, allowing for adjustments as the project evolves. NRM2, however, requires detailed measurement of all components, ensuring accuracy in bills of quantities.
- Output:
- The primary output of NRM1 is a cost plan that outlines the estimated costs for different elements of the project. The main output of NRM2 is a bill of quantities that itemizes all materials, labor, and services required for construction.
- Use in Contracting:
- NRM1 is primarily used for cost planning and budgeting, providing a framework for financial control during the design stages. NRM2 is used for tendering and contracting, ensuring that contractors have a clear and accurate basis for pricing their bids.
NRM1 and NRM2 are essential tools in construction cost management, each serving distinct roles in the project lifecycle. NRM1 provides a structured approach to cost estimating and planning during the early design stages, ensuring that projects remain financially viable. NRM2, on the other hand, focuses on detailed measurement and quantification of building works, facilitating accurate pricing and effective cost control during the construction phase. Together, these guidelines from the RICS ensure consistency, transparency, and reliability in managing construction costs, ultimately contributing to the success of construction projects.