NRM1, NRM2, NRM3: The New Rules of Measurement Explained

Ask five quantity surveyors what the new rules of measurement actually cover and you will likely get five overlapping but slightly different answers. That is not because anyone is confused about the basics - it is because NRM1, NRM2 and NRM3 do genuinely different jobs, at different stages of a project, for different audiences. Pull out the wrong one and you will either hand over a cost plan that is too vague to control a budget with, or a bill of quantities that is needlessly granular for what a client actually asked for.

This guide breaks down what each of the three NRM volumes is for, how they slot into the RIBA Plan of Work, and where they replaced older standards such as SMM7 and CESMM. Whether you are prepping for the RICS APC, building your first formal cost plan, or drafting a bill of quantities for tender, you should come away knowing exactly which rulebook applies and why.

Published by the Royal Institution of Chartered Surveyors' Quantity Surveying and Construction Professional Group, the New Rules of Measurement is a suite of three linked documents that together cover the entire cost lifecycle of a building - from early feasibility estimate, through detailed tender pricing, to ongoing maintenance and renewal decades after practical completion.

By the end of this article you will be able to say, with confidence, which NRM volume governs which task, spot the practical differences between NRM2 and SMM7, and know where NRM3 fits once a building has been handed over. Let's start with the headline answer, then work through each volume in turn.

Together, the three volumes give quantity surveyors and commercial managers a consistent, 'cradle to grave' method of pricing a building - from the first back-of-envelope feasibility figure to the maintenance budget decades after the building opens its doors.

What Is the New Rules of Measurement (NRM)?

Why RICS Created NRM

Before NRM existed, UK cost estimating and cost planning had no single standardised method - practices varied firm to firm, which made benchmarking difficult and increased the risk of disputes over what a cost plan or estimate actually included. RICS developed the New Rules of Measurement to give the profession a consistent, transparent methodology that clients, contractors and cost consultants could all rely on, and that would stand up to scrutiny during audits, disputes or value engineering exercises.

NRM1 was first published in February 2009 and is now in its second edition (with an October 2021 update). NRM2 followed in April 2012, becoming operative on 1 January 2013 and formally replacing SMM7 on 1 July 2013. NRM3 was published in March 2014, with an updated edition released in October 2021 to bring it into line with current asset management practice. All three are available through RICS and isurv, and their use is effectively the industry default on UK building projects.

• NRM1 - order of cost estimates and cost plans during design, before a bill of quantities exists
• NRM2 - detailed measurement rules for producing bills of quantities and tender documents
• NRM3 - cost planning for maintenance, renewal and whole-life costing once the building is in use

NRM1: Order of Cost Estimating and Cost Planning

What NRM1 Covers

NRM1 - Order of Cost Estimating and Cost Planning for Capital Building Works - provides the methodology for quantifying building works before detailed drawings or a bill of quantities exist. It covers order of cost estimates prepared at the earliest feasibility stage, and the formal, elemental cost plans (typically labelled Formal Cost Plan 1, 2 and 3) that are refined as the design develops. NRM1 also sets out how to quantify preliminaries, overheads and profit, design development risk allowances, construction risk allowances, and inflation - the wider costs that sit alongside the measured works and that are easy to underestimate if you are new to cost planning.

Who Uses NRM1, and When

NRM1 is the tool of choice for the cost consultant or PQS working alongside the design team from RIBA Stage 0 through to Stage 3, when the client needs increasingly reliable cost information to make go/no-go decisions, secure funding, or compare design options. Because it uses an elemental structure (substructure, superstructure, internal finishes, services, and so on), NRM1 cost plans are also the natural benchmarking format - a QS can compare a scheme's cost per element against BCIS data or past projects far more easily than with a trade-based breakdown.

• Order of cost estimate - the first, high-level budget figure, often based on floor area and unit rates
• Formal cost plan - a progressively more detailed elemental breakdown as design information increases
• Risk allowances - separately identified design development risk and construction risk, rather than a single hidden contingency
• Inflation - both tender price inflation to the base date and build cost inflation across the construction period

NRM2: Detailed Measurement for Building Works

Detailed Measurement for Bills of Quantities

NRM2 - Detailed Measurement for Building Works - is the volume most QSs mean when they talk about 'the rules of measurement' day to day. It sets out the rules for measuring building work in enough detail to produce a bill of quantities, a quantified schedule of works, or a schedule of rates, so that contractors can price a tender on a like-for-like basis. NRM2 became operative on 1 January 2013 and formally replaced the Standard Method of Measurement, 7th edition (SMM7), on 1 July 2013 - a transition that took several years to complete across the industry as firms updated templates, software libraries and training.

How NRM2 Is Structured

NRM2 is organised into three parts: general rules that apply across all work sections (covering things like measurement conventions, coverage rules and abbreviations), rules for detailed measurement of building works, and tabulated rules of measurement broken down by work section - from demolitions and groundworks through to services and external works. Compared with SMM7's 22 trade sections, NRM2 splits work into 41 work sections, which means far fewer items are simply 'deemed included' within a broader rate. Reveals, sills and copings, for example, are measured separately in NRM2 where SMM7 bundled them into the surrounding item.

NRM3: Order of Cost Estimating for Building Maintenance Works

Cost Planning for the Building's Operational Life

NRM3 - Order of Cost Estimating and Cost Planning for Building Maintenance Works - fills a gap that neither NRM1 nor NRM2 addresses: how to cost the building once it is finished and handed over. It provides guidance for preparing initial order of cost estimates, general cost plans and asset-specific cost plans for maintenance, renewal and replacement works across a building's operational life, along with guidance on procurement routes and cost control for maintenance programmes.

Where NRM3 Fits in Facilities and Asset Management

NRM3 is used far more by facilities managers, asset managers and building surveyors than by the QS who priced the original construction contract - though the two roles increasingly overlap on projects using whole-life costing to inform design decisions. A component chosen at RIBA Stage 3 because it is cheap to install can turn out to be far more expensive to maintain, and NRM3 gives the profession a consistent way to quantify that trade-off before it is locked in.

• Planned preventive maintenance - cyclical costs for redecoration, servicing and component replacement
• Responsive/reactive maintenance - budgeting for unplanned repairs based on failure rates and asset condition
• Whole-life costing - comparing capital cost against lifetime maintenance and renewal cost for design options
• Renewal and replacement cost planning - forecasting major component replacement across a 25-60 year horizon

NRM1 vs NRM2 vs NRM3: Side-by-Side Comparison

The table below summarises the practical differences between the three volumes - what each one is called, when it is used, who typically uses it, and what it produces. Use it as a quick reference when you are not sure which document governs the task in front of you.

The chart below puts NRM2's level of detail in context against the standard it replaced. NRM2's 41 work sections - nearly double SMM7's 22 trade sections - is the single biggest practical difference QSs notice when they move from one to the other.

How NRM Maps to the RIBA Plan of Work

One of the most useful ways to understand NRM is to overlay it on the RIBA Plan of Work 2020, since each NRM volume broadly corresponds to a cluster of RIBA stages. This is also a favourite APC exam question, so it is worth having the mapping clear in your head rather than memorised as three disconnected facts.

In practice, the boundaries are not always as clean as the diagram suggests - a QS might still be refining an NRM1 cost plan into early Stage 4 while the design team finalises technical details, and NRM2 measurement often starts before Stage 4 is formally signed off in order to keep the programme moving. The important principle is continuity: the elemental structure set up in the NRM1 cost plan should still be traceable through the NRM2 bill of quantities and, eventually, into the NRM3 maintenance plan.

NRM vs SMM7 and CESMM: What Changed

NRM2 vs SMM7

For QSs who trained on SMM7, the shift to NRM2 was more than a rebrand. Beyond the extra work sections, NRM2 introduced clearer definitions of prime cost and provisional sums, tightened the rules around risk and contingency so they sit with NRM1 rather than being buried in the bill, and structured its work sections to be more compatible with quantities taken off directly from a BIM model - a deliberate design choice, given how much of the industry has since moved toward model-based measurement software.

NRM and CESMM: Not the Same Discipline

It is worth being clear that NRM does not cover civil engineering works. For roads, bridges, drainage infrastructure and similar, UK practice uses the Civil Engineering Standard Method of Measurement, 4th edition (CESMM4), published by the Institution of Civil Engineers. A QS working across mixed building and infrastructure packages - a hospital with associated highways works, for example - may need to apply NRM2 to the building elements and CESMM4 to the civils elements within the same project.

Practical Tips for Applying NRM Correctly

• Keep your NRM1 elemental cost plan structure consistent with the NRM2 bill of quantities that follows it, so cost checks remain traceable through the project
• Use estimating and takeoff software with a built-in NRM2 work section library (CostX, CATO and similar) rather than adapting old SMM7 templates
• Do not assume 'deemed included' items are the same as under SMM7 - check the coverage rules for each NRM2 work section before pricing
• Flag risk allowances and inflation separately per NRM1, rather than folding them into a single contingency line that hides where the money actually sits
• When maintenance cost planning is in scope, loop in NRM3 early - retrofitting whole-life costing after design freeze is far less effective

Frequently Asked Questions

What does NRM stand for in quantity surveying?

NRM stands for New Rules of Measurement, a suite of three standards published by RICS - NRM1, NRM2 and NRM3 - that together govern how UK quantity surveyors estimate, measure and cost-plan building works from feasibility through to maintenance.

What is the main difference between NRM1 and NRM2?

NRM1 covers order of cost estimating and elemental cost planning during design, when detailed drawings do not yet exist. NRM2 covers detailed measurement once technical design is complete, producing the quantities used to build a bill of quantities for tender.

Is NRM2 mandatory on UK construction projects?

NRM2 is not a legal requirement, but it is the de facto industry standard for measuring building work in the UK and is specified in most standard forms of appointment and many procurement documents, making it the default choice in practice.

What replaced SMM7?

NRM2 replaced the Standard Method of Measurement, 7th edition (SMM7). NRM2 became operative on 1 January 2013 and formally superseded SMM7 on 1 July 2013, though many firms transitioned gradually over the following years.

When should you use NRM3 instead of NRM1 or NRM2?

Use NRM3 once a building is complete and in use, for cost planning maintenance, repair, renewal and whole-life costing decisions. NRM1 and NRM2 apply during the design and construction phases, before and up to tender respectively.

How many work sections does NRM2 have?

NRM2 organises detailed measurement into 41 work sections, compared with 22 trade sections in the older SMM7, reflecting a more granular approach with fewer items deemed included within broader rates.

Do I need to know NRM for the RICS APC?

Yes. NRM1 and NRM2 are core knowledge for the Quantity Surveying and Construction pathway of the RICS APC, particularly for the Commercial Management of Construction and Design Economics and Cost Planning competencies, and are commonly tested in the final assessment interview.

Final Thoughts

NRM1, NRM2 and NRM3 are not three competing standards to memorise in isolation - they are three chapters of the same cost story, handed from the cost consultant at feasibility, to the QS pricing the tender, to the facilities manager budgeting for the next roof replacement twenty years later. Understanding where one stops and the next starts is one of the clearest signs of a QS who has moved beyond exam theory into practical fluency.

If you are studying for the APC or new to cost planning, the fastest way to make this stick is to work through a real project end to end - pull up an NRM1 cost plan and an NRM2 bill from the same scheme if you can, and trace how the same elements reappear in more granular form. The structure will click far faster than reading the rulebooks cover to cover.

Want the full picture? Want the full cost management picture?

Read our companion guides on Construction Cost Estimating: A Beginner's Step-by-Step Guide and How to Prepare a Bill of Quantities to see NRM1 and NRM2 applied to a worked example, or check out the RICS APC Guide if you are preparing for assessment.