Scope: Practical commentary on NEC4 ECC. Check the edition, selected options, Contract Data and amendments used on your project.
Identify the contractual event
The standard NEC4 ECC clause 60.1 contains 21 compensation events. Other provisions, selected options and Contract Data can add events. Check the executed contract rather than relying on a generic list.
An event may affect cost, time, both or neither. Identifying a compensation event does not establish the amount of a change or guarantee an extension. Avoid treating compensation events as the only possible source of any contractual payment or remedy.
Keep notification separate from evidence gathering
The Project Manager and Contractor have different notification duties. Under clause 61.3, the Contractor normally has eight weeks from becoming aware that an event has happened, subject to the exception for events the Project Manager should have notified. Check amendments and send a compliant notification without waiting for the final valuation.
An early warning or site diary entry can support the chronology, but neither substitutes for the required compensation event notification.
Track the reply and quotation stages
Record the Project Manager’s response, the instruction to submit quotations and the quotation deadline. If the Project Manager misses a reply, check the relevant failure-notice procedure. Clause 61.4 does not produce immediate deemed acceptance simply because the initial week has passed.
A quotation should show the basis of the cost and time assessment, with supporting programme changes where required. Record agreed extensions of response periods.
Explain the effect
Identify the dividing date under clause 63.1. Distinguish actual Defined Cost from forecast Defined Cost and apply the relevant Fee and cost rules. Show the effect on planned Completion and relevant Key Dates using the contractual programme basis.
Link resources, quantities and assumptions to the event. Avoid double counting between events, routine payment and other adjustments.
Close the contractual record
Implementation is addressed in clause 66 of NEC4 ECC. Retain the accepted quotation or assessment, revised Prices and dates, and supporting communications. Update the commercial register so that proposed, assessed and implemented figures are distinguishable.
Keep unresolved matters visible. Do not describe global claims as categorically prohibited or suggest that every disagreement disappears at implementation; any later challenge depends on the contract and applicable dispute process.
Sources and further reading
- NEC: Purposes of notifications
- NEC: Accepted programmes
- NEC: Introduction to compensation events
- GMH Planning/CECA: Getting compensation events implemented (practical commentary; check the applicable contract and amendments).
- NEC: NEC4 ECC flow charts and clause contents
Related GMH guidance and discussion
These are practical commentary and discussion. Check the NEC edition and project amendments; older posts may use earlier clause numbering.
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