NRM1 vs NRM2: what is the difference?

The New Rules of Measurement family

The Royal Institution of Chartered Surveyors publishes the New Rules of Measurement as a suite. NRM1 covers order of cost estimating and cost planning for capital building works. NRM2 covers detailed measurement for building works. NRM3 covers order of cost estimating and cost planning for building maintenance works. Together they give UK quantity surveyors a consistent approach across the life of a building.

NRM1: cost estimates and cost plans

NRM1 is used while a building is being designed. Early on, it supports an order of cost estimate based on floor area, functional units or elemental rates. As the design develops, it supports formal cost plans organized into group elements: facilitating works, substructure, superstructure, internal finishes, fittings, services, prefabricated buildings, work to existing buildings and external works. On top of the building works it sets out how to present preliminaries, overheads and profit, fees, other development costs, risk allowances and inflation.

The aim is a cost plan that the client and design team can use to make decisions, with clear allowances for what is not yet designed.

NRM2: detailed measurement for bills of quantities

NRM2 is used when the design is detailed enough to measure for tender. It replaced the Standard Method of Measurement, seventh edition (SMM7), and sets out how each work section is measured and described, from preliminaries and demolitions through excavating and filling, in-situ concrete, masonry, structural metalwork and carpentry to finishes, mechanical and electrical services and builder’s work in connection. Bills prepared to NRM2 let every contractor price exactly the same, consistently described items.

The key differences at a glance

The two documents serve different moments and different readers.

• Stage: NRM1 during design; NRM2 at tender and after.
• Structure: NRM1 by element; NRM2 by work section.
• Detail: NRM1 uses composite and elemental rates; NRM2 measures individual items.
• Output: NRM1 produces estimates and cost plans; NRM2 produces bills of quantities.
• Users: NRM1 mainly for clients and design teams; NRM2 for tenderers and contract administration.

How they connect in practice

A well-run project carries the same cost story from one to the other. The NRM1 cost plan sets targets for each element. When the bill of quantities is prepared to NRM2 and priced, the tender can be analyzed back into the same elements and compared with the cost plan, showing exactly where the market came in above or below expectation. Contractors pricing design and build work often use both: an elemental check against the employer’s budget, and their own measured quantities to price and buy the work.

Which one will you meet as a contractor?

On traditionally procured projects, contractors receive a bill prepared to NRM2 and price it. On design and build projects, they usually receive employer’s requirements and a design rather than a bill, so they measure their own quantities, often following NRM2 conventions so that subcontract packages can be bought on a consistent basis. NRM1 matters to contractors mostly through the client’s cost plan: understanding how the budget was set helps explain why a tender is above or below expectations, and where value engineering will have the greatest effect.

Measuring services under NRM

Mechanical and electrical services are often the largest single cost group, and they are treated differently from building fabric. Under NRM1 they appear as the services group element, broken into sub-elements such as heat source, ventilation, electrical installations and fire protection. Under NRM2 they can be measured in detail or presented as priced schedules, depending on how far the design has progressed and how the tender is structured.