New guidelines from the RICS enabling a holistic view of project costs are a giant leap forward for the industry


For years advocates have been calling for an end to the fixation with project capital cost and for awareness that operating costs are also very important. Whole life costing, it is argued, would be a better guide to what is truly economic and more sustainable. The industry’s construction strategy for 2025 calls for a 33% cut in capital costs but also an equal fall in whole life costs.

But these arguments usually fell on deaf ears. Apart from the structural barriers such as operating costs being met by different stakeholders from those meeting capital costs, the main weakness was that nobody knew much about repair and maintenance costs. There were no conventions for their capture and comparison, no classification and no benchmarks. So whilst whole life costing was possible in theory, it was rickety in practice and not trusted.

This all helps to answer client questions like: “What should be the budget for cost in use?”

The New Rules of Measurement, Part 3, from the RICS, ends that era. NRM3 provides a system for capturing and managing life cycle costs. It has been in planning for 16 years and in development for 7 of them. It has now been trialled by major clients like Heathrow and Network Rail who use it to prioritise spending. RICS is running roadshows round the country to introduce it to the industry.

Operating and maintenance costs are predominantly for building services. NRM3 aligns with key documents from the services maintenance world: CIBSE Guide M and the Building and Engineering Services Association’s SFG20, its standard specification for maintenance. It also fits with COBie, the format for translating building information models into spreadsheet form for maintenance purposes. So the key services maintenance and renewal data can now be collated and classified in a consistent way. Services capital costing was always a weak area for QSs; now lifecycle-based choices can be more soundly made. BS8544, the standard for life cycle costing of maintenance, is brought to life. This all helps to populate the data drops in BIM, answering client questions like: “What should be the budget for cost in use?”

NRM3 completes the set of NRM guides for cost planning, capital investment and operating phases of projects. But it also enables the new territory of life cycle cost to be opened up and fully integrated into client decision making. The fixation on capital cost can soon be put in its place and a more sustainable world result…a giant leap for the industry.

Richard Saxon is the UK’s BIM ambassador for growth. He is also on the board of the CIC, responsible for innovation.