The questions quantity surveyors and commercial managers actually ask about NEC4, gathered from contract helpdesks, practitioner forums and NEC guidance, answered clearly and linked to the full clause-by-clause guide for each topic.
NEC4 questions answered is a running reference of the recurring, real-world questions contractors, subcontractors and project managers ask about compensation events, early warnings, time bars, payment, disallowed cost and programme under the NEC4 Engineering and Construction Contract.
Answers below reflect the standard NEC4 ECC clause numbering (Options A to F share the core clauses; payment and disallowed cost mechanics vary by option, noted where relevant). They are general guidance, not advice on your specific contract — check your Contract Data for amendments before relying on any answer here.A compensation event is any of the 21 events listed at clause 60.1 of the NEC4 ECC that entitles the contractor to a change in the Prices, the Completion Date, or both. The most common in practice are a Project Manager instruction changing the Scope (60.1(1)), the Project Manager or Supervisor not replying within the period required (60.1(6)), unforeseen physical conditions (60.1(12)), and weather measured against the weather data in the Contract Data (60.1(13)).
See Gather's full guide: NEC4 Compensation Events: Complete Clause 60.1 Guide.
NEC4 does not mandate a specific log format, but in practice every contractor managing more than a handful of compensation events needs one. Without a register, the two things that go wrong are the same every time: the eight week time bar deadline is worked out by hand and missed, and the log only captures events someone remembered to notify — not the ones evidenced in the diary but never raised.
Gather has a free template: Compensation Event Log Template: Free NEC4 CE Register (Excel).
Only if the conditions are ones an experienced contractor would have judged to have such a small chance of occurring that it would have been unreasonable to allow for them, and they weren't reasonably foreseeable from the Site Information provided. The test is objective — it's not about what your team actually assumed, but what a reasonably experienced contractor would have priced for given the Site Information at Contract Date.
More detail in Gather's guide: NEC4 Compensation Events: Complete Clause 60.1 Guide.
Under clause 62.3, the contractor normally has three weeks to submit a quotation after being instructed to. If the Project Manager doesn't get a quotation and doesn't extend the period, clause 64 lets the Project Manager assess the compensation event themselves — usually less favourably to the contractor than a well-evidenced quotation would have been.
An early warning (clause 15) is a notice given by the contractor or the Project Manager as soon as either becomes aware of a matter that could increase the total of the Prices, delay Completion or a Key Date, or impair the performance of the works in use. The obligation is triggered by awareness of the risk, not by waiting until the consequences are certain — that's the single most common way early warnings arrive late.
Full guide: NEC4 Early Warnings: Clause 15 Guide for Contractors.
Clause 61.5 and 63.7 let the Project Manager assess a compensation event as if an early warning had been given when it should have been — meaning the contractor can be assessed as if they'd had time to mitigate a risk they didn't actually get the chance to. On some options, cost that could have been avoided by an early warning that wasn't given is also treated as Disallowed Cost. The mechanism is corrective, not punitive, but the practical effect on value is real.
A defect on its own generally isn't required to be early-warned as a defect — Section 4 deals with defects separately. But if the defect (or its correction) could increase the Prices, delay Completion or a Key Date, or impair performance in use, then that consequence is an early warning matter in its own right, separate from the defect notification itself.
NEC4 doesn't mandate formal minutes, but clause 16 requires the Project Manager to instruct the contractor to attend the first early warning meeting within two weeks of the starting date, then hold further meetings at intervals no longer than stated in Contract Data, and to record and issue actions after each one. In practice, a documented risk register from those meetings is usually the single most useful contemporaneous record when a compensation event is later disputed.
Eight weeks from the contractor becoming aware of the event, under clause 61.3. This is the NEC4 default and can be amended in Contract Data Part 1 — check yours, because shortened time bars are more common in subcontracts than many teams expect.
It's absolute, not discretionary. If notification lands outside the eight weeks, the contractor's right to a change in the Prices and Completion Date for that event is gone — the Project Manager doesn't weigh up lateness, genuineness or impact. There's no partial credit for being close.
See: Compensation Event Log Template: Free NEC4 CE Register (Excel).
No. The eight week time bar doesn't apply to compensation events that arise from the Project Manager or Supervisor giving an instruction, issuing a certificate, or changing an earlier decision — the Project Manager already knows about those, so there's nothing for the contractor to notify them of. In practice this means the time bar bites hardest on physical conditions, weather, and access-type events, which is exactly where contractors most often lose entitlement.
The clock starts from when the contractor became aware that the event has happened, not from the date the underlying event occurred. This matters for slow-onset issues like ground conditions discovered progressively, or design information that arrives incomplete — the "aware" date is a judgement call that needs contemporaneous evidence to defend.
Payments are assessed at each assessment date, at intervals stated in the Contract Data (typically monthly), starting one month after the starting date. The contractor submits an application before each assessment date; the Project Manager certifies the amount due within one week of the assessment date, showing both the amount and the basis it was assessed on — a transparency requirement NEC4 introduced over NEC3.
Full guide: NEC4 Payment: Clauses 50–53 Guide.
Under clause 50.4/50.5, if the contractor doesn't submit an application by the date it's due, the Project Manager assesses the amount due — and critically, that assessed amount cannot exceed the amount in the previous certificate. In practice this means missing an application caps you at last month's number even if more is genuinely due.
NEC4's own drafting only requires the contractor's application to state the sum considered due. But under the Construction Act, for that application to count as a valid "default payment notice" if the Project Manager fails to certify, it needs to also set out the basis the sum was calculated on — so most well-run applications include that breakdown as standard practice, not just contractual box-ticking.
Clause 51.3 (in the standard, unamended form) entitles the contractor to interest on any late payment, calculated from the date payment was due to the date it's actually paid, at the rate stated in the Contract Data. It accrues automatically on the certified amount — it doesn't need a separate notice or claim to trigger, though contractors often still have to chase it in practice.
Disallowed Cost (defined at clause 11.2(25) in the ECC) is cost the Project Manager decides shouldn't be paid because it wasn't incurred properly — for example cost that wouldn't have been incurred if the contractor had followed an acceptance or procurement procedure the contract requires, cost of correcting defects, or cost of resources not used to Provide the Works. It only reduces payment on cost-reimbursable options (C, D, E); it's not a concept on lump-sum Option A or remeasured Option B.
See: NEC4 Compensation Events: Complete Clause 60.1 Guide for how Disallowed Cost interacts with compensation event assessment.
Only if that cost falls within one of the specific bullet points in the clause 11.2(25) definition — a Project Manager's general view that a cost was "too high" isn't itself a basis for disallowance unless it maps to one of those defined grounds (e.g. resources not used to Provide the Works, or cost that should have been avoided by an early warning). This is a recurring dispute point on Option C projects, and it's exactly why keeping records that evidence resource use against activity is worth the effort.
The time bar under clause 61.3 applies to notifying compensation events, not to the Project Manager's ongoing right to review Defined Cost for Disallowed Cost at each assessment. In practice, that means a contractor can still find cost disallowed at a later assessment even after a related compensation event has already been agreed — the two mechanisms run on different clocks.
Clause 31.3 lists the only valid reasons: the contractor's plans aren't practicable, it doesn't show the information the contract requires, it doesn't represent the contractor's plans realistically, or it doesn't comply with the Scope. A Project Manager can't reject a programme simply because they disagree with the sequencing or don't like the float shown — it has to fall under one of those four grounds.
See: NEC4 Response Periods: Complete Deadlines Guide for the two week acceptance period this sits inside.
If the Project Manager doesn't reply within the two week period (or the period stated in Contract Data) and doesn't extend it, that failure to reply is itself a compensation event under clause 60.1(6) — the contractor is entitled to a change in Prices or Completion Date for the delay and disruption that silence causes, on top of still needing the programme accepted.
No — clause 14.1 makes clear that Project Manager acceptance of a programme (or of a communication generally) doesn't change the contractor's responsibility to Provide the Works, nor does it relieve the contractor of any liability. Acceptance means the programme meets the clause 31.3 tests; it isn't a certification that every duration or logic link shown is achievable, and it isn't a waiver of anything.
Most of what goes wrong above — a missed time bar, an early warning that never happened, Disallowed Cost nobody evidenced — starts with something that should have been in the site diary and wasn't flagged in time. Gather's AI QS reads your site diaries and records against the NEC4 clauses and surfaces the compensation events and risks your team hasn't notified yet, before the clock runs out.
See how the AI QS catches missed CEs A 30 minute call. No commitment. Bring one of your live contracts.Gather reads your site diaries as they come in and flags the compensation events before the time bar does.
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