NEC4 Compensation Events: How Contractors Should Assess Delay Impacts

If you’re working under the NEC4 Engineering and Construction Contract (ECC), understanding how to assess the impact of compensation events on time is critical - especially when it comes to protecting your entitlement to extensions and avoiding disputes.

This post outlines how to approach delay assessments correctly under clause 63.5, based on the updated guidance from NEC (January 2019), and what it means for contractors.

What Clause 63.5 Means in Practice

When a compensation event occurs, clause 63.5 requires two things:

1. Assess the impact it has on planned Completion and Key Dates, and

2. Use the Accepted Programme current at the dividing date (usually the date the Project Manager notified the event or the Contractor notified it - whichever came first).

The aim is to show how this specific event affects the programme - nothing more, nothing less.

What You Must Include in the Assessment

Your delay analysis should account for:

• Delays already in the Accepted Programme (for example, if the event was raised earlier as an early warning or prevention event).

• Any other events between the last Accepted Programme and the dividing date, including:

  • Other compensation events.

  • Non-compensation delays (like weather or subcontractor issues) that actually occurred.

Even completed activities might have been impacted by the event - and that needs to be recognised in the assessment, though you won’t change their actual dates.

Your Role in the Delay Assessment

As a contractor, you need to:

• Identify which activities the event affects.

• Adjust durations for affected tasks that are still in progress or yet to start.

• Build in realistic risk allowances and show how you’ve planned to mitigate the effects - assuming competent and timely action from your team.

• Use the logic from your Accepted Programme as the starting point for your delay model.

You can create a separate programme just for the assessment (a CE analysis programme). It doesn't need to be submitted for acceptance - but it does need to be clear and robust.

What if the Accepted Programme Is Out of Date?

This is a common problem. Here's how to deal with it:

• If long gaps between updates were agreed in the Contract Data, use the latest programme and follow the steps above.

• If you haven’t submitted a revised programme as required, the Project Manager may assess the event under clause 64 - potentially using an old programme.

• If you submitted a recent programme that hasn’t been accepted, try to agree it can be used for the assessment. If agreement can’t be reached, the Project Manager must fall back on the last Accepted Programme.

Tip: Always keep your programme submissions up to date and address reasons for non-acceptance early.

Don’t Let Logic Errors Undermine Your Entitlement

Sometimes, the Accepted Programme may contain logic issues that make the effect of a compensation event look worse (or better) than it really is. If that happens, work with the Project Manager to resolve it - don’t let errors in the logic cost you time or money.

Dealing with Multiple Compensation Events

If several events arise close together, assess them individually and sequentially - unless all parties agree it’s sensible to group them. Just make sure you factor in earlier events before moving on to the next.

Final Thoughts

For contractors, the key takeaway is this:If you want to get properly compensated for time, your delay assessments must be based on clear evidence, sound logic, and a programme that reflects what’s really happening on site.

At NEC Planning Solutions, we support contractors across the UK with expert planning, delay analysis, and claim support under NEC4. Get in touch if you need help preparing robust assessments or dealing with disputed programmes - we speak the same language as your PM.