A cost codification framework is a numeric coding structure that can be used to uniquely identify projects, sub-projects, group elements, elements, sub-elements and components. It is derived from the cost breakdown structure (CBS).
The framework sets the rules for how cost codes are built, so that every item in an estimate or cost plan has a code showing exactly where it sits in the hierarchy. NRM 1 provides a framework of this kind, which allows cost plans to be reorganised from elements into work packages for procurement and allows costs to be collected consistently for future benchmarking. A clear framework agreed at the start of a project saves time later when costs need to be compared or analysed.
- It should align with the client’s own reporting and accounting codes where possible.
- It links the cost breakdown structure with the work breakdown structure.
Related terms: cost code, cost breakdown structure, work breakdown structure, benchmarking.

