NEC4 Compensation Events: How to Get Quotations Agreed
- Roman Bazelchuk
- 8 hours ago
- 4 min read
NEC4 Compensation Events are meant to keep time and money discussions current, not turn into end-of-project arguments. In practice, they stall for one reason: the contractor cannot present a clear, auditable story that a Project Manager can accept quickly.
On live jobs, the test is simple. Can you show what changed, what it drove on the programme, what you did to mitigate, and what decision is needed, by when?
If you can, quotations get agreed faster. If you can’t, everything drifts and you end up relying on retrospective narrative.
Why NEC4 Compensation Events drift
First, time bars are real. Under clause 61.3, many contractor-notified compensation events can be time-barred if they are not notified within 8 weeks of the contractor becoming aware that the event has happened.
Second, people use the wrong programme reference. The accepted programme “current at the dividing date” is the anchor for assessment (clause 63.5), and a later revised programme can be irrelevant if it was issued after the dividing date.
Third, quotations are often submitted as cost spreadsheets plus a narrative. That makes it hard for the PM to test time impact and assumptions quickly, so the response becomes “revise and resubmit”.
The simplified NEC4 Compensation Events Guide
Use this as the backbone of your CE tracker and as the structure for how you package each event.
Step | What the contract clock is driving | What you issue | Output the PM can act on |
1. Notify the CE | Protect time bar and start the formal process | CE notice with event, dates, clause trigger, affected areas | Clear record that the CE is live |
2. Build the quotation | Produce a forecast-based quotation (time + cost) | Quotation + assumptions + programme extract (impacted chain) | A “yes / no / revise” decision, not a debate |
3. PM reply | Keep momentum and avoid silence | Short cover note stating what decision is required and by when | Accept / ask to revise / PM assesses |
4. If PM doesn’t reply | Use the non-response mechanism cleanly | Notice of failure to reply (then treated acceptance if continued non-response) | Prevents quotations sitting in limbo |
The Decision Pack that gets CEs agreed
A decision pack is not longer. It is tighter. It gives the PM a structured route to acceptance.
Keep it to five parts:
Cover sheet
CE reference, clause trigger, key dates, what you want the PM to do, and the decision-by date.
Programme extract
Show the impacted chain and interfaces (access, energisation, testing gates). Keep it visual. If the event does not drive completion or a key date, say so.
Cost summary
Define what is included, what is excluded, and what is forecast. Avoid burying assumptions inside spreadsheets.
Assumptions register
Five to ten assumptions max. Each assumption must tie to a line of cost or a programme logic point.
Evidence index
List the core contemporaneous records: instruction/notice, RFI responses, meeting minutes, access releases, delivery confirmations, permits, photos where relevant. This is what turns your pack from “argument” into “audit”.
Dividing date discipline
If you want fewer rejected quotations, make this part non-negotiable internally.
Use the accepted programme current at the dividing date when explaining time impact, not a later “cleaned-up” revision.
State your dividing date basis on the cover sheet so everyone is anchored to the same reference point. If your programme is out of date, fix the programme cycle quickly. Otherwise you will spend the CE process arguing about baselines instead of impacts.
What makes NEC4 Compensation Events feel controlled
Most problems with NEC4 Compensation Events are not technical. They are operational. When the process is run with deadlines, a consistent pack, and a clear programme reference point, the conversation stays prospective and commercial positions stay calm.
If you want a simple way to judge whether your CE process is working, use this test: could a new PM pick up your submission and understand, within five minutes, what changed, what it drove, what you did about it, and what decision is needed? If the answer is yes, you are in a strong place. If the answer is no, your quotation is likely to bounce around revision cycles and lose momentum.
A quick “do this next week” checklist
Put every CE into a tracker with four dates: awareness date, notification date, quotation due date, PM reply due date.
Standardise the submission format. Same decision pack layout every time, no exceptions.
Make the programme extract the centrepiece. One impacted chain, clearly shown, with the interfaces that matter.
Keep assumptions short and explicit. If an assumption is critical, it must be visible, not hidden in a spreadsheet.
Run a weekly CE triage slot. Fifteen minutes is enough if the pack is consistent.
If you want to make NEC4 Compensation Events faster, calmer and more defensible, the quickest step is to standardise the Decision Pack and run the CE clock as a live control process rather than a document exercise. If you are curious how we support this in practice, take a look at our How it Works page, which explains our director-led QA approach, what we review, and how we embed a simple monthly reporting rhythm around your Accepted Programme.
References
NEC Contract – Time-barred compensation events (NEC4 ECC clause 61.3) https://www.neccontract.com/support/faqs/time-barred-compensation-events
NEC Contract – Using the correct programme (Accepted Programme at the dividing date – clause 63.5) https://www.neccontract.com/support/faqs/using-the-correct-programme
NEC Contract – Accepting quotations in a timely manner (non-response / treated acceptance mechanism) https://www.neccontract.com/support/faqs/accepting-quotations-in-a-timely-manner