NEC4 Common Mistakes: What QS Teams Get Wrong

Every commercial manager has a version of this story. A compensation event that was valid, well-founded, and completely time-barred. The client knew about it. The Project Manager knew about it. Everyone on site knew the event had happened. But the 8-week clock had ticked past, no notification had been raised, and the entitlement was gone.

NEC4 is designed to reward disciplined contract administration and punish disorganised teams. That is not a bug. It is a deliberate feature. The contract was written by people who believed that good process produces better outcomes — and that teams who cannot follow the process should not expect to recover the same entitlement as teams who do.

For QS and commercial teams administering NEC4 contracts, that design principle creates real financial exposure. The mistakes covered here are not theoretical. They are the ones that appear in adjudications, in delay claims that unravel at disclosure, and in final accounts that settle for far less than the contractor was owed.

1. Missing the 8-Week Time Bar on Compensation Events

This is the most expensive mistake in NEC4 administration. Under Clause 61.3, if a contractor becomes aware of a compensation event and fails to notify it within 8 weeks, the right to a change in the Prices, the Completion Date, or any Key Dates is lost. The event still happened. The cost was still incurred. The entitlement simply no longer exists at law.

The time bar is not a technicality that sympathetic adjudicators overlook. It is a contractual condition precedent. Adjudicators and courts have consistently upheld it, even when the underlying event was unambiguously a Client-risk event and both parties knew it at the time. NEC itself has acknowledged the harshness of the provision and proposed reforms, but the clause as written remains enforceable. The NEC4 eight-week time bar is one of the most litigated provisions in UK construction contracting for precisely this reason.

The failure mode is almost always the same. The event happens on site. The site team flags it informally. Everyone assumes someone else has raised the CE. Eight weeks later, the commercial team discovers the gap — often when preparing a monthly report or reviewing a running total of open CEs. By then, Clause 61.3 has done its work.

The fix: Build a CE register that logs the date the team became aware of each event alongside the notification deadline. Review it weekly. Any event approaching week 6 without a notification raised should trigger an immediate flag to the commercial manager. Do not rely on site teams to self-report — they are focused on getting the work done, not on contractual deadlines.

2. Treating Early Warning Notices as Optional

Under Clause 15, both the contractor and the Project Manager are obliged to give early warnings for any matter that could affect the Prices, the Completion Date, a Key Date, or performance in use. The early warning register is a contract document. Failing to give an early warning is a breach of contract — and it has a direct commercial consequence.

If a contractor should have given an early warning and did not, the Project Manager can invoke Clause 63.7 — but only if they state in the instruction to submit quotations that an experienced contractor would have given an early warning of the event. Clause 63.7 is not automatic. When invoked, the compensation event is assessed as if the early warning had been given: the assessment considers what mitigation the early warning meeting would have generated and deducts the avoidable element from the assessment. On large compensation events, that deduction can be substantial.

Most site teams treat early warnings as paperwork. They are not. They are the mechanism by which the contractor builds a contemporaneous record of risk awareness, forces the client into a collaborative discussion about mitigation, and protects its entitlement if the Project Manager later invokes Clause 63.7. The NEC4 early warning process is both a risk management tool and a commercial protection mechanism. CECA's NEC4 Bulletin No.5 provides further guidance on the liability consequences of failing to notify.

The fix: Treat every new site risk as a potential early warning trigger. If a risk could affect cost, time, or quality, it should go on the early warning register. Raise the formal notice first, discuss the substance second. The discussion can happen informally — but the paperwork needs to exist before the event materialises.

3. Poor Site Diary Records That Cannot Substantiate Claims

A compensation event quotation is only as strong as the records behind it. Under Clause 62, the contractor's quotation must include a programme showing the impact of the event and an assessment of changes to the Prices. The Project Manager will scrutinise both. If the site diary does not support the narrative — if it does not record the specific resources deployed, the specific hours lost, the specific work affected — the quotation will be challenged.

The most common failure is site diaries that record activity rather than disruption. "Brickwork to grid C, 8 operatives, 7 hours" tells the QS nothing about what went wrong. "Brickwork to grid C suspended 14:00–17:00, 8 operatives stood down, awaiting Client instruction on revised setting-out detail — 24 man-hours lost, refer CE-017" is a commercial record.

Poor site records are not just a problem for compensation events. They are a problem for disallowed cost assessments, delay analyses, concurrent delay arguments, and any dispute that goes to adjudication. The adjudicator's job is to find facts. If your records do not provide those facts, the adjudicator has to work with what the other side puts forward.

The fix: Set a site diary standard that links daily entries to open CEs and early warnings by reference number. Train supervisors on what a commercial record looks like versus an activity log. Review a sample of site diaries weekly — not monthly — so that gaps are identified in real time rather than retrospectively.

4. Letting the Project Manager's Clock Run Out

Under Clause 62.6, the Project Manager has the period for reply to respond to a submitted quotation — typically 2 weeks as stated in Contract Data, though some contracts set this at 3 or 4 weeks. Always check Contract Data Part 1 at project start, not when a deadline appears to have been missed. If the Project Manager does not respond within that period, the contractor can invoke the "deemed acceptance" mechanism under Clause 62.6.

Many contractors do not use this. They wait, send a chaser, wait again, and ultimately accept a late assessment that bears no resemblance to their original quotation. The deemed acceptance mechanism exists precisely to prevent this. A Project Manager who is slow to assess is not administering the contract correctly. The contractor should enforce the contractual response periods, not absorb the Project Manager's delay as additional overhead.

The same principle applies to Clause 61.4 — the Project Manager's 1-week deadline to notify whether they agree an event is a compensation event. Allowing response periods to drift without enforcement trains the Project Manager to treat the contract as informal. The NEC4 response periods are contractual obligations on both parties, not aspirational targets.

One important nuance: Clause 62.6 deemed acceptance is not automatic. The passage of two weeks without a PM response does not by itself constitute acceptance — the contractor must actively issue a formal notification invoking the deemed acceptance mechanism. Teams that do not track PM response deadlines miss this commercial advantage entirely.

The fix: Log every notification sent with its contractual response deadline. When a deadline passes without a response, send a formal notice referencing the clause and stating the consequence. Do this consistently from the first month of the contract. It sets the commercial tone and prevents the informal drift that creates disputes later.

5. Confusing NEC3 and NEC4 Processes When Transitioning

Teams that administered NEC3 contracts and have moved to NEC4 without formal retraining make characteristic errors. The differences between the two versions are not cosmetic — they include substantive changes to clause numbering, assessment methodology, and obligations on both parties.

The most common confusion points are the early warning register (now a contract document under NEC4, with formal meeting obligations and renamed from "Risk Register"), the change to the dividing date assessment methodology under Clause 63, and the renumbering of the early warning sanction from Clause 61.5 in NEC3 to Clause 63.7 in NEC4. A team applying NEC3 habits to an NEC4 contract will typically undernotify, under-document, and misalign their quotations with the correct assessment basis.

The dividing date under NEC4 is particularly misunderstood by teams transitioning from NEC3. The prospective assessment methodology — assessing what the compensation event should cost based on what was known at the dividing date, not what was actually incurred — changes how quotations should be built. Teams still building cost-based retrospective quotations are not maximising their entitlement under the contract they signed.

The fix: Before starting a new NEC4 contract, run a half-day clause comparison session with the commercial team. Identify the specific NEC3 habits that need to change. Do not assume that experience with NEC3 is sufficient — the differences matter in practice.

6. Underestimating the Programme's Contractual Weight

In most construction contracts, the programme is a project management tool. In NEC4, the Accepted Programme is a contract document. The difference has significant commercial implications.

Clause 31 defines what the programme must show. Clause 32 sets out the update obligations. The Accepted Programme is the baseline against which compensation event time impacts are assessed under Clause 63. A contractor who does not maintain a compliant, updated, accepted programme cannot demonstrate the time impact of a compensation event because there is no contractual baseline to measure against.

The failure modes are well-documented: programmes submitted but not accepted (no formal acceptance means no Accepted Programme), programmes updated but not resubmitted for acceptance, programmes that do not show float or the critical path logic required by the contract. All of these leave the contractor unable to demonstrate time entitlement under Clause 63 — without an Accepted Programme, the Project Manager assesses compensation events using their own assumptions under Clause 63.1 rather than the contractor's baseline, which consistently undervalues entitlement. The full implications are covered in the NEC4 programme management guide.

The fix: Treat programme acceptance as a commercial activity, not a programme management activity. The QS or commercial manager should track programme submission and acceptance status alongside the CE register. If the Project Manager has not accepted the current programme, that is a live commercial risk — raise it formally and do not wait for the next monthly report to address it.

7. Using Informal Communication for Formal Contractual Notices

NEC4 requires notices, instructions, certificates, and proposals to be communicated in a specific way. Clause 13 sets out the communications requirements. Notices must be in writing. They must be issued separately from other communications. They must be sent to the named address or system specified in the Contract Data.

Teams with good working relationships frequently bypass these requirements. A compensation event is discussed in a site meeting and minuted rather than formally notified. An early warning is raised verbally at a progress meeting. An instruction is given by email to the site manager rather than to the named Contractor's address under the contract. None of these constitute valid contractual notices.

When the relationship sours — and on a long NEC4 project, it often does — the informality becomes a liability. The contractor has a CE they believe they notified but cannot point to a formal notification. The Project Manager disputes that an instruction was ever given. Site meeting minutes are admissible as evidence but are not a substitute for a contractual notice. Informal communication is a trap that closes slowly and painfully.

The fix: Use a contract management system that separates formal notices from general correspondence. Every compensation event notification, early warning, programme submission, and instruction should move through a formal channel with a timestamp and delivery record. This is not bureaucracy. It is the difference between having a claim and being able to prove it.

How Gather Helps Teams Avoid These Mistakes

The mistakes above share a common thread: they are process failures, not knowledge failures. Most commercial teams administering NEC4 contracts know what the clauses require. The problem is that NEC4 generates a high volume of contractual obligations — notifications, responses, programme updates, CE assessments — across projects where the site team is focused on delivery rather than administration.

Gather's QS AI Agent reviews site diary records against the open CE register, identifies gaps between site activity and commercial notifications, and flags early warning risks before the 8-week clock becomes a problem. On a £50 million NEC4 project with 40 active compensation events, manual tracking across scattered records creates exactly the conditions where Clause 61.3 catches teams out. Gather Insights clients identify 40% more compensation events than teams relying on manual review — because the AI reviews every site diary entry, not just the ones that make it into the weekly commercial report.

For teams managing the transition from NEC3 to NEC4, or running multiple contracts simultaneously, the volume of contractual obligation is the real challenge. Gather provides the systematic oversight that turns NEC4's demanding administration requirements from a liability into a competitive advantage.