The New Rules of Measurement (NRM) suite, published by the Royal Institution of Chartered Surveyors (RICS), represents the definitive framework for construction cost estimation in the United Kingdom. NRM1, specifically, provides the rules for order of cost estimating and cost planning for capital building works. For contractors, quantity surveyors, and project managers, understanding NRM1 is essential for producing estimates that are accurate, consistent, and professionally credible.
This guide provides a practical overview of NRM1, explaining its structure, key principles, and how it can be applied in day-to-day construction practice.
What Is NRM1?
NRM1 — formally titled 'RICS New Rules of Measurement: Order of Cost Estimating and Cost Planning for Capital Building Works' — was first published in 2009 and updated in 2012. It replaced the earlier Standard Method of Measurement (SMM7) for cost planning purposes and provides a structured approach to estimating construction costs at every stage of a project, from initial feasibility through to detailed cost planning.
The framework is designed to work alongside the RIBA Plan of Work stages, ensuring that cost information is developed progressively as the design evolves. This alignment means that estimates become more detailed and accurate as more design information becomes available.
The Structure of NRM1
NRM1 organises construction costs into a clear hierarchy. At the highest level, costs are divided into building works, main contractor's preliminaries, main contractor's overheads and profit, project and design team fees, other development and project costs, and risk allowances. Within building works, costs are further broken down into elements and sub-elements that correspond to specific parts of the building.
This hierarchical structure serves several important purposes. It provides a consistent framework for comparing costs across different projects. It ensures that all cost components are captured and nothing is overlooked. And it creates a common language that all parties — from clients to contractors to quantity surveyors — can understand and work with.
Key Elements in NRM1
The building works section of NRM1 is divided into several major groups: substructure, superstructure, internal finishes, fittings and furnishings, services, prefabricated buildings and building units, work to existing buildings, and external works. Each group is further subdivided into elements and sub-elements that provide increasingly granular cost breakdowns.
For example, the superstructure group includes elements such as frame, upper floors, roof, stairs and ramps, external walls, windows and external doors, and internal walls and partitions. Each of these elements can be further broken down to capture specific construction methods, materials, and specifications.
Why NRM1 Matters for Contractors
For contractors, NRM1 compliance offers several practical benefits. First, it demonstrates professionalism and competence to clients and other project stakeholders. Estimates produced in accordance with NRM1 are immediately recognisable and credible within the UK construction industry.
Second, NRM1 provides a systematic approach to cost estimation that reduces the risk of omissions. By following the structured element breakdown, estimators can ensure that all aspects of the project are captured in the cost plan. This is particularly valuable for complex projects where the risk of overlooking cost items is high.
Third, NRM1 facilitates benchmarking and cost comparison. Because the framework provides a consistent structure, costs from different projects can be compared on a like-for-like basis. This enables contractors to identify trends, validate estimates, and improve their pricing accuracy over time.
Applying NRM1 in Practice
In practice, applying NRM1 involves several steps. The estimator begins by reviewing the available design information and determining the appropriate level of detail for the estimate. At early design stages, this might involve broad elemental estimates based on cost per square metre. As the design develops, the estimate becomes more detailed, incorporating specific quantities and rates for each sub-element.
Modern AI-powered estimation tools can significantly streamline this process by automatically extracting quantities from drawings and mapping them to NRM1 elements. This automation reduces the manual effort required and helps ensure consistency in how costs are classified and reported.