NEC4 Compensation Events Without an Accepted Programme

On a lot of NEC projects, the Accepted Programme is missing, out of date, or stuck in review. The common reaction is to stall compensation events until the programme is “sorted”. That delays agreement, drives people into retrospective positions, and increases dispute risk.

You can still progress a defensible compensation event assessment without a current Accepted Programme, if you lock down the dividing date position, state the baseline clearly, and submit a clean evidence pack that a Project Manager can review quickly.

What the contract logic still gives you

Cost assessment still works. Clause 63.1 is built on a split between actual Defined Cost for work done by the dividing date and forecast Defined Cost for work not yet done. The dividing date is set by the contract and is intended to stop hindsight arguments.

Time impact assessment still works, but you must be explicit on the baseline used. On NEC4 ECC, the programme acceptance mechanism sits under Clause 31.3. If the last Accepted Programme is old, you can still assess the time effect against it, but you need to show progress since that baseline and the revised logic caused by the event.

The court point you should take seriously

Northern Ireland Housing Executive v Healthy Buildings (Ireland) Ltd [2017] NIQB 43 is the cautionary example. The case dealt with what happens when a compensation event is priced and assessed after the work has been carried out, and whether actual costs become relevant in that situation.

In simple terms, once you let an event drift into a retrospective assessment, you invite arguments that undermine the “forecast” discipline NEC is trying to maintain. The practical lesson is to push CEs through early, anchored to the dividing date, while the assessment is still genuinely prospective.

NEC4 compensation events without accepted programme: the minimum viable CE pack

Item	What you submit	Why it matters
Dividing date	One line stating the dividing date and why it applies	Fixes the actual vs forecast split and reduces hindsight debate
Baseline	Identify the last Accepted Programme revision and date. If none exists, say so and state the best contractual reference you are using	Stops “moving baseline” arguments and frames the assessment
Impact logic	A small fragnet or marked-up extract showing the changed sequence and the impacted activities	Makes the time effect reviewable, not opinion
Progress record	Dated progress evidence mapped to activities or work areas (photos, diary notes, measures)	Protects causation and credibility
Assumptions list	A short assumptions register (access, hours, productivity, interfaces)	Turns disagreement into a finite list the PM can accept or amend
Forecast build-up	Forecast Defined Cost build-up with basis of rates and quotes	Makes the quotation reviewable and defensible
Submission trail	Dates of notices, quotation submissions, PM replies, revisions	Protects your process position if it escalates

How to deal with “no accepted programme” without escalating

Keep it factual and give the PM a route to act.

Suggested paragraph you can use:

“The last Accepted Programme is Rev [x] dated [date]. For this compensation event we have assessed the time effect against that baseline, using the dividing date position. We have included a progress record and a fragnet showing the revised sequence caused by the event. If you want an updated programme for acceptance, we can submit that in parallel, but the CE assessment can be progressed on the enclosed basis.”

Common failure modes and the fix

Failure mode 1:

Waiting for the programme to be accepted before quoting.

Fix: quote now with a clear baseline statement, assumptions, and a fragnet. Run programme acceptance in parallel under Clause 31.3.

Failure mode 2:

Letting the event drift until the work is done, then arguing about forecast.

Fix: keep CE turnaround tight. Healthy Buildings shows why late, retrospective positions create avoidable disputes about actuals versus forecast.

Failure mode 3:

Submitting a programme update that does not show the story.

Fix: your pack needs a short narrative plus a small logic extract. If a third party cannot follow the logic, the PM will not accept it.

References

1. Northern Ireland Housing Executive v Healthy Buildings (Ireland) Ltd [2017] NIQB 43 (judgment PDF). https://www.judiciaryni.uk/files/judiciaryni/decisions/Northern%20Ireland%20Housing%20Executive%20v%20Healthy%20Buildings%20%28Ireland%29%20Limited.pdf?

2. NEC commentary on retrospective assessment and Healthy Buildings. https://www.neccontract.com/news/assessing-compensation-events-retrospectively?srsltid=AfmBOorzss1oUOBoxxoAfa1oq6bmJE4DZmxo5j8nDbdJB6zc0JW-6XQP&

3. NEC guidance on “forecast” in Clause 63.1 and dividing date. https://www.neccontract.com/news/understanding-the-critical-%E2%80%98f-words%E2%80%99-that-make-nec-contracts-different?srsltid=AfmBOoqBiybEFSXAihID3chImqKHMb1crGBiy44cnIi_dP5QkyUWoWMW&