Scope: Practical commentary on NEC4 ECC. Check the edition, selected options, Contract Data and amendments used on your project.
Identify the date from the event
Clause 63.1 separates actual Defined Cost of work done by the dividing date from forecast Defined Cost of work not done by that date, together with the resulting Fee.
Where the event arises from the Project Manager or Supervisor giving an instruction or notification, issuing a certificate or changing an earlier decision, the relevant communication determines the date. For other compensation events, the notification of the compensation event determines it. Check the exact wording and amendments for the event being assessed.
Do not substitute the quotation submission date, the date of agreement or the date the work finished merely because it is convenient.
Keep actual evidence and forecast assumptions distinct
For work done by the date, retain the records supporting the applicable Defined Cost. For later work, explain forecast resources, productivity, sequence and risk allowances. Apply the cost components required by the selected main option.
The assessment concerns the effect of the compensation event. It is not simply a claim for all expenditure booked to the project after an instruction.
Use the contractual programme basis
Identify the Accepted Programme current at the dividing date and explain the event’s effect using the clause 63 time-assessment rules. Keep actual progress and the logic of the remaining work visible. Where the conditions for the Project Manager’s own assessment apply, review clause 64; do not invent a separate default programme rule in clause 63.1.
NEC’s Practice Note 1.1 (January 2019) explains that the assessment also takes account of delay from the event already reflected in the Accepted Programme and events between that programme’s date and the dividing date. The aim is to isolate the effect of the compensation event being assessed.
For the cost side, see GMH’s webinar on assessing compensation event costs.
Record uncertainty explicitly
Keep a short assessment note stating the event, dividing date, source communication, programme version, cost basis and assumptions. Where the Project Manager states assumptions under clause 61.6, distinguish these from the Contractor’s ordinary estimating assumptions.
An implemented assessment is not routinely reopened just because actual outcomes differ from a forecast. Check the contractual route for any later correction rather than silently replacing the agreed assessment with actual cost.
Sources and further reading
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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