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Quantification & Costing > NRM > Flashcards

NRM Flashcards

1
Q

What is the status of NRM?

A

It is a guidance note - meaning it is not compulsory but is seen as ““best practice””
If it is not taken into account, this could be seen as ““negligent”” in a claim

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2
Q

What is the purpose of NRM1?

A
  • Provides guidance on the quantification of building works for OCE and Cost Plans
  • Provides rules of measurement to aid understanding through design team
  • Provides direction on how to describe and deal with costs and allowance that are part of the cost of a building, but that aren’t reflected in measurable work items
  • Second edition allows better distinguishment between capital building works and building maintenance
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3
Q

What is NRM1 used for?

A
  • OCE
  • Elemental cost models
  • Cost plans
  • Cost analysis
  • Benchmark analysis
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4
Q

What abbreviations are there in NRM?

A

EUQ - Element Unit Quantity unit of measurement that relates solely to quantity of element
EUR - Element Unit Rate (total cost of element (incl. Plant, materials, subcont prelims and OH&P)/ EUQ)
NIA
GIA
PC Sum - Prime Cost Sum

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5
Q

NRM Definition: Base Cost Estimate

A

Sum of works cost estimate + project / design fees estimate + other development costs estimate

Excludes allowances for risk or element inflation

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6
Q

NRM Definition: Base Cost Estimate

A

Sum of works cost estimate + project / design fees estimate + other development costs estimate

Excludes allowances for risk or element inflation

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7
Q

NRM Definition: Base date of cost data

A

Date that rates and prices contained within cost analysis / benchmark analyses are taken

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8
Q

NRM Definition: Component

A

Measured item that forms part of an element

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9
Q

NRM Definition: Construction inflation

A

Allowance included for fluctuations in basic prices of labour, plant, equipment and materials during the period from date of tender return, to the mid point of construction period

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10
Q

NRM Definition: Cost limit

A

Authorised budget / approved estimate. Maximum expenditure the employer is prepared to make for completed building

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11
Q

NRM Definition: Cost target

A

Recommended total expenditure for an element. Derived from number of components

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12
Q

NRM Definition: Element

A

Major part of a group element e.g. 3: Internal Finishes = 3.1 Wall, 3.2 Floor, 3.3 Ceiling

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13
Q

NRM Definition: Elemental cost analysis

A

Appraisal of costs in previously constructed buildings aimed at providing reliable information

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14
Q

NRM Definition: Elemental cost plan

A

Breakdown if cost limit for the building into cost targets for each element . Provides work / cost breakdown structure

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15
Q

NRM Definition: Enabling works

A

Works executed ahead of the main building contract. Include a mixture of new building works and facilitating works such as major demolition, removal of contaminated materials and new access road, new drainage etc

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16
Q

NRM Definition: Estimate base date

A

Date cost limit is established (excluding inflation) as a basis for calculating inflation, changes etc

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17
Q

NRM Definition: GIA

A

Area of a building measured up to the internal face of the perimeter walls at each level

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18
Q

NRM Definition: Functional unit method

A

Rough budget setting technique consisting of selecting a suitable standard functional unit, including for circulation space

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19
Q

NRM Definition: Group Elements

A

Refers to the main heading used to describe the facets of an elemental cost plan:

  • Substructure
  • Superstructure
  • Internal finishes
  • Fittings, furnishings and equipment
  • Services
  • Complete buildings and building units
  • Work to existing buildings
  • External works
  • Facilitating Works
  • MC Prelims
  • MC OH&Ps
  • Project / design fees
  • Other development costs
  • Risks
  • Inflation
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20
Q

NRM Definition: MC OH&P’s

A

Costs associated with head office administration proportioned to each building. Exclude costs associated with subcontractors OH&P

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21
Q

NRM Definition: MC Prelims

A

Items which cannot be allocated to a specific element or component but that are necessary to complete the works. E.g insurances, bonds, cleaning etc

Time - management and staff, security
Fixed - site establishment,

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22
Q

NRM Definition: Other development costs

A

Costs not directly associated with cost of constructing building e.g. Section 106 / 278

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23
Q

What is the purpose of an OCE? NRM1

A
  • Is the project affordable?
  • What is a realistic cost limit?
  • Support with the identification of procurement methods to be used
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24
Q

What is needed to prepare an OCE? NRM1

A

o Location and availability of site
o Building use
o Floor area and accommodation schedule
o Requirements for refurbishment
o Initial project brief
o Enabling works details
o Indicative programme
o Any particular restraints
o Site conditions
o Budget/ cash flow constraints
o Life span
o Storey heights
o M&E
o Requirements of
 Project team fees
 Other project costs
 Treatment of inflation
 Treatment of VAT
- Design (floor plans, services specifications, advice on ground conditions, elevations)
- Initial risk registers from deign team

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25
Q

What items are included in an OCE? NRM1

A

o Project title & description
o Statement of cost incl cost limit
o Details on the information it has been prepared from
o Statement of floor areas
o Assumptions
o Estimate base date (that inflation has been applied to)
o Estimated costs and requests for alternative proposals (e.g. option costs)
o Inclusions and exclusions

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26
Q

What are the headings of the cost build up for an OCE? NRM1

A
  • Facilitating works estimate
  • Building works estimate
  • MC Prelims
  • Sub total
  • MC OH&P
  • Works cost estimate total
  • Project / design team fees
  • Other development costs

Applied on to total base cost estimate:
- Risk allowance estimate
- Tender inflation estimate
- Construction inflation estimate

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27
Q

Give examples in the categories of risk you should apply when costing construction works (NRM1)

A

Design
- inadequate design, unrealistic programme, inadequate site investigation

Construction
- Archaeological remains, inadequate site investigation, ecological issues

Employer change
- Change in quality, time, employer driven variations, change in scope

Employer other
- Third party (planning refusal), Management (ineffective cost control procedures), Financial (unavailability of funds), Timescales (unrealistic programmes), Project brief (end user requirements), Other (force majeure)

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28
Q

How do you calculate measurement of facilitating works? NRM1

A
  • SA, area affected, linear meters, number or itemised
  • SA = total area of site - existing building footprints
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29
Q

What is the elemental method of OCE? NRM1

A
  • Considers the major elements and prices and OCE based on the breakdown
    0 - Facilitating Works (m2)
    1 - Substructure (m2)
    2 - Superstructure (m2)
    3 - Internal finishes (m2)
    4 - Fittings, furnishings and equipment (m2)
    5 - Services (nr / kW / m2)
    6 - Prefabricated buildings (m2)
    7 - Work to existing buildings (m2)
    8 - External works (m2)
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30
Q

What are the sub-components of the superstructure? NRM1

A
  • Frame
  • Upper floors
  • Roof
  • Stairs and Ramps
    -External walls
  • External windows and doors
  • Internal walls
  • Internal doors
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31
Q

What are the sub-components of the services? NRM1

A
  • Sanitary installations
  • Services equipment
  • Disposal installations
  • Water installations
  • Heat source
  • Space heating and air conditioning
  • Ventilation
  • Electrical installations
  • Fuel installations
  • Lift and conveyor installations
  • Fire & lighting protection
  • Communication, security and control systems
  • Specialist installations
  • BWIC
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32
Q

What is included in rates? NRM1

A

Material, plant, equipment, subcontractors OH&P and prelims

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33
Q

What is excluded from rates? NRM1

A

Main Contractor OH&P / prelims
Inflation
Risk
VAT

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34
Q

How do you update rates of benchmarked data to current estimate base dates? NRM1

A

Current UR = cost data UR + (cost data UR x percentage addition for inflation)

P = ((current index - index at base date of cost data)/ index at base date of cost data) x 100

35
Q

How do you calculate MC OH&P / Prelims? NRM1

A

Applied as a % to the building works estimate
OH&P’s are also applied to the prelims as a % (NRM1 suggests they are calculated individually and added together)
Recommended they are treated as a separate target cost

36
Q

According to NRM1, should design fees be included in OCE’s?

A

Yes, unless specifically requested by the client
- Recommended that separate allowances are made for consultant fees; MC pre-construction fees; MC design fees
- Applied as a %
- E.g PM, Architect, QS, MC offices, MC telecommunications

37
Q

According to NRM1, should other development costs be included in OCE’s?

A

Yes, unless specifically requested by the client
- Added as a lump sum allowance which should be ascertained with the Employer
- E.g. Land acquisition costs, fees, insurances

38
Q

How do you apply risk to OCE’s? (NRM1)

A

Risks should be properly considered and made for the 4 categories as a calculated as a %

39
Q

How should risk be responded to? (NRM1)

A
  • Risk avoidance (e.g. of alternative design solution)
  • Risk reduction ( e.g. more detailed design, change in specification to avoid long lead times)
  • Risk transfer (e.g where accepting risk would not give employer value for money)
  • Risk sharing
  • Risk retention (residual risk exposure)
40
Q

What inflation should be considered when costing? (NRM1)

A
  • Tender; period from the estimate base date to the date of tender return. Added to the cost limit (excl. construction inflation)
  • Construction; period from the date of tender return to the mid-point of the construction period. Added to the cost limit (including all inflation)
41
Q

How is inflation added to OCE’s?

A

Tender and construction inflation added separately
Calculated using published indices or in-house sources
TPI, RPI or Building cost indices

42
Q

What indices would you consider for calculating inflation? What are the benefits / draw backs?

A
  • RPI - measures price increases in retail, usually higher than CPI
  • CPI - internationally comparable, used by UK Gov
  • TPI - changes in tenders for similar types of work
  • Construction Materials Price Indices - trend of input costs in terms of building materials
  • RCI - (resource cost indices), changes in cost of materials and labour
43
Q

What is the purpose of cost planning? (NRM1)

A
  • Part of RIBA 2 - 4
  • Ensures employers get value for money
  • Make employers and designers aware of the cost consequences of proposals
  • Advise designers to help them arrive at designs within budget
  • Keep expenditure within cost limit
  • Provide robust cost info to help employer make informed decisions
44
Q

What is cost planning used for? (NRM1)

A
  • Budgeting technique implemented during the design stages
  • Cost limit is broken down into cost targets for each element
  • Provides Work Breakdown Structure (WBS) and Cost Breakdown Structure (CBS) which can redistribute works in elements to construction work packages to aid procurement
  • Helps control cost at procurement
45
Q

What items are to be included in a cost plan report? (NRM1)

A
  • Exec summary
  • Statement of cost
  • Status of cost plan
  • Statement of floor plans
  • Cost plan
  • Assumptions
  • Estimate base date
  • Reasons for changes
  • Value engineering options
  • Conclusions
  • Recommendations
  • Cash flow forecast
  • Inclusions and exclusions
46
Q

How many cost plans do you usually do and at what stages? (NRM1)

A

Stages 2 - 4
Normally 3 formal cost plans (may have 4th at handover for renewal / maintenance)
Cost plan 1 - scope of work is defined and key criteria is specified but not detailed design, forms the basis for 2 and 3
Following cost plans are used to check progress, additional design details
Stage 4 may also be a PTE, providing a frame for appraising tenders

Before progressing to next RIBA stage, important to ensure project is:
- Affordable,
- Cost target for each element is reasonable
- Cost limit is not exceeded

47
Q

On RBWM, what stage was the project?

A

Stage 1 - Preparation and Brief (RIBA)

48
Q

Full Names of NRM

A

NRM 1 - OCE of cost estimating and cost planning for capital building works
NRM 2 – Detailed Measurement of Building Works
NRM 3 - OCE and cost planning for building maintenance

49
Q

What is the structure of NRM1?

A

Part 1 - General - cost estimating / planning in the contract of RIBA plan of works, abbreviations and definitions in the rules
Part 2 - Rules for OCE - key constituents, OCE using floor area, functional unit and elemental methods
Part 3 - Rules for Cost planning - key constituents and elemental cost plans
Part 4 - Tabulated rules of measurement for elemental cost planning
Appendices with definitions of GIA, NIA and templates

50
Q

What is involved in the formal cost plans?

A

Cost plan 1 - occurs at completion of concept design (RIBA 2). Condensed list of elements is used

Cost plan 2 - completion of design development (RIBA 3/4).

Cost plan 3 - based on technical design, specifications and detailed information

51
Q

Difference between a Cost Estimate and Cost Plan?

A

A cost estimate is used to set the cost limit for a project based upon early design information, whereas a cost plan is a breakdown of the cost limit into elemental cost targets against which design development can be monitored and which is ultimately signed off by the client prior to the design proceeding to the next stage.

52
Q

How would you approach a stage 1/2/3 cost plan?

A

Stage 1 -order of cost estimate often based on cost per functional unit or cost per m2 / ft2.
Stage 2 -order of cost estimate based on elemental approximate quantities / formal cost plan 1.
Stage 3 -formal cost plan 2, detailed rates and measures.
Stage 4 -formal cost plan 3 / PTE

53
Q

Why was NRM 2 2nd edition published?

A

Publications of:
- ICMS (Global Consistency in Presenting Construction Lifecycle Costs and Carbon Emissions)
- IPMS
- Cost Prediction - RICS Professional Statement
- RIBA Plan of Work 2020

54
Q

What is the hierachy of documents in the quantification and costing suite?

A
  • ICMS
  • Cost Prediction, RICS Professional Statement

Followed by NRM 1, 2 and 3”

55
Q

How does NRM 1 link to ICMS stages?

A

Elemental cost breakdown can be done to ICMS mapping at Level 4 (Cost sub-groups)

56
Q

What are the sub-groups in ICMS Level 4?

A
  • Demolition, site preparation and formation
  • Substructure
  • Structure
  • Architectural works (non-structural)
  • Services and equipment
  • Surface and underground drainage
  • External and ancillary works
  • Preliminaries, construction site overheads and general requirements
  • Risk allowances
  • Taxes and levies
  • Work and utilities off-site (incl. risk allowances, taxes and levies)
  • Production, loose furniture, fixtures and fittings (incl. risk allowances, taxes and levies)
  • Construction related consultants and supervision (incl. risk allowances, taxes and levies)
57
Q

How does NRM define the role of ICMS?

A
  • International standard setting out the classification, definition, measurement, recording, analysis, present and compare construction project life cycle costs in a structured and logical format
  • Promotes consistency and transparency internationally
  • Does not include detailed measurement rules
  • Measurement for OCE and Cost Plans remains in line with NRM1 or NRM3 for renewal / maintenance
58
Q

What is the purpose of NRM2?

A
  • Addresses production of BoQ’s, Quantified Schedules of Works and Work Schedules
  • Used for the designing and developing schedules of rates
  • Standard set of measurement rules for procurement of building works
59
Q

What types of BoQ are there? (NRM2)

A

Firm - obtain lump sum for fully designed project

Approximate - subject to remeasurement, similar to a quantified schedule of rates due to be remeasured

60
Q

What is the purpose of a BoQ? (NRM 2)

A

To provide a co-ordinated list of items with descriptions to enable contractors to prepare tenders efficiently

Provide basis for the valuation of works executed for interim payments or varied works

Provide real-time cost data for future project benchmarking

61
Q

Why is detailed measurement beneficial? (NRM2)

A
  • Can support with the production of comparable pricing schedules from different tenderers
  • Extensive and clear statement of works to be executed
  • Basis for budget control and accurate cost reporting
  • Preparation of cash flows
  • Basis for valuing variations and progress payments
62
Q

What procurement routes use BoQ? (NRM 2)

A

All except D&B which uses ER’s where contractor will prepare a BQ or quantified schedule

63
Q

What sections are in a BoQ? (NRM 2)

A
  • Form of tender
  • Summary
  • Preliminaries
  • Measured Works
  • Non-measureable works
  • Provisional Sums
  • Contractor design works
  • Risks
  • Dayworks
64
Q

How are preliminaries divided? (NRM 2)

A
  • Information and requirements
  • Pricing schedule
65
Q

What is within the information and requirement preliminaries? (NRM 2) Eddington

A
  • Sets out project particulars e.g title, site address
  • Drawings the BQ is based
  • Boundary of site
  • Information of existing buildings and mains services
  • Known constraints / restrictions that may impact methodology
  • Describes building works
  • Standard form of contract, CP’s and amendments
  • Confirms method of measurement
  • Sets out client’s specific requirements for; progress reporting; quality standards; security, safety and protection; facilities and temporary works; advertising; O&M of finished building

Eddington - groundworks contractor to complete archaeological works so not within main contract, requirement for a show apartment

66
Q

Who prices preliminaries? (NRM 2)

A

Cannot be done by QS. To be done by contractor as for the contractor to interpret the information within the tender invitation document and ascertain method of working and resources required to complete.

Should be fully broken down to identify items and the cost for each. Where not specified in the breakdown, the costs are considered to be nil or included elsewhere

67
Q

What is included in the pricing schedule of the preliminaries? (NRM 2)

A

2 main cost centres:
- ER’s e.g. site accommodation where separate from MC’s, site record, O&M manuals, handover requirements
- Main Contractor’s cost items e.g. project-specific staff, staff travel, temporary services, safety training, surveys

68
Q

What non-measurable works might there be in a BoQ? (NRM 2)

A
  • Provisional sums
  • CDP
  • Works by statutory undertakers (given as defined prov sum)

OH&P’s made separately

69
Q

How is risk managed in BoQ? (NRM 2)

A
  • Risk transfer to contractor = cost certainty, higher premium, detailed in ““Schedule of construction risk””, includes for time, planning and pricing
  • Risk sharing = improves control, reduces client exposure, pricing risk by contractor and quantification risk by client
  • Risk retention by client = reduced cost, limits cost certainty
70
Q

What are OH&P’s applied to? (NRM 2)

A
  • Prelims
  • Measured work
  • Risk allowances
  • Work resulting from expenditure of provisional sums
71
Q

How may clients gain credit on works? (NRM 2)

A

During demolition or refurbishment of buildings. May seek credits for building materials, plant, component, FF&E.

Stevenage client credit for steel and materials following demolition to the value of £150k

72
Q

What types of specification may be considered when measuring works? (NRM 2)

A
  • Prescriptive - required to prepare a firm BQ. Prescribe materials and workmanship required, specific products and materials named or published standards such as British Standards. Client design responsibility.
  • Performance - Requirements of product in terms of performance objectives e.g. window u value, heat pump output. Contractor design and responsibility
73
Q

What drawn information should be available for producing tender documents? (NRM 2)

A
  • General Arrangements e.g. block plan, site plan, sections, elevations
  • Component drawings e.g. for manufacture and interfaces such as structure and balconies
  • Schematic drawings e.g. how something works and relation between the parts such as electrical wiring
  • Record drawings e.g. existing / as built
74
Q

What information should be available for producing tender documents? (NRM 2)

A
  • Drawn
  • Schedules (e.g room, area, door, windows)
  • Reports / other (e.g. party walls, rights of light, environmental, wildlife surveys, area schedules)
75
Q

What are the breakdown structures of BoQ? (NRM 2)

A
  • Elemental - as per NRM 1, each group element is a separate section
  • Work section - measurements and descriptions in work sections
  • Work package - client or contractor defined. Specific trade or a package comprising number of trades
76
Q

What are the identifications number levels in cost planning? (NRM 2)

A

Level 0 - Project number
Level 1 - Cost plan number
Level 2 - Group element (defined by NRM 1)
Level 3 - Element (defined by NRM 1)
Level 4 - Sub-element (defined by NRM 1)
Level 5 - Component (defined by NRM 1)

77
Q

What is the standardised process of breaking down work packages? (NRM 2)

A

There isn’t one, it is project dependent as to what will be appropriate

78
Q

How are BoQ used as a method of cost control? (NRM 2)

A
  • Pre tender estimate
  • Post tender estimate - used to corroborate funding level required including updates of design and project fees and other project costs
  • Cost planning - Formal 3 provides basis for appraising tenders
  • Pricing variations
  • Interim valuations
79
Q

How should preliminaries be measured according to NRM 2?

A
  • Component listing the items for consideration
  • Included notes on pricing column lists of the subitems for each item
  • Unit lists unit of measurement
  • Pricing method stating fixed, time or combined
  • Excluded describes those items excluded from a component
80
Q

What should be included in the description of measured works? (NRM 2)

A
  • Type and quality of material
  • Critical dimension (L x W x H)
  • Method of fixing or installing
  • Nature or type of background e.g. timber, plastic, metal etc
81
Q

What should be included in the rate of each component? (NRM 2)

A
  • Labour
  • Materials
  • Assembling, installing, fixing
  • Plant
  • Waste of goods / materials
  • Rough and fair cutting
  • Establishment charges
  • Compliance with legislation e.g H&S, disposal
82
Q

What works should be stated separately? (NRM 2)

A
  • Works to existing buildings
  • Works carried out and then removed
  • Works of extraordinary conditions such as in, on or underwater, tidal conditions
83
Q

What should be done where type of product or component is not specified? (NRM 2)

A

Prime Cost Price - estimate price for the component e.g. “prime cost price per thousand delivered to site”

84
Q

What should be done where quantity of product is not able to be determined? (NRM 2)

A

Provisional quantity
Where variance from provisional quantity is less than 20%, rate shall not be reviewed

Quantification & Costing (6 decks)

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