Compensation Events

The compensation event mechanism is how NEC4 administers every change to cost or time, replacing the claims-and-variations machinery of traditional contracts. This chapter takes the practitioner through the full process, beginning with the twenty-one events listed at clause 60.1 and following them through notification, quotation, and assessment to implementation. The eight-week time bar at clause 61.3 receives close attention as the most commercially consequential deadline, alongside the three deemed acceptance routes that protect the Contractor where the Project Manager fails to respond. The dividing date that anchors the actual-versus-forecast cost split is set out, and the marginal cost test for physical conditions is treated separately. The aim is to equip practitioners on either side of the contract to administer the process prospectively rather than as a retrospective claims exercise.