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NEC4 is built on early notification. The Contractor and Project Manager must give early warnings as soon as they become aware of matters that could affect cost, time or performance, and some notifications carry strict time limits.
The Contractor and Project Manager each give an early warning as soon as they become aware of a matter that could increase the Prices, delay Completion or a Key Date, or impair the performance of the works.
Under NEC4 ECC clause 61.3, the Contractor notifies a compensation event within eight weeks of becoming aware of it. Miss that window and, in many cases, the Prices and Completion Date are not changed.
Quotations, replies and assessments each run to their own timescales. Losing track of one can decide the outcome, for either party.
NEC4 is the standard choice across UK public sector infrastructure and is widely used on major programmes and frameworks in Ireland and internationally.
NEC4 is the fourth edition of the New Engineering Contract family, published by the Institution of Civil Engineers in 2017. It is designed to encourage good management and collaboration, with clear timescales for both parties.
Options A and B are priced contracts, with an activity schedule or a bill of quantities. Options C and D are target cost contracts, where cost savings and overruns are shared. Option E is cost reimbursable and Option F is a management contract.
An early warning flags a matter that could affect cost, time or performance, so it can be managed before it grows. A compensation event is an event that can change the Prices and the Completion Date, and the Contractor must notify it within eight weeks of becoming aware of it.
The Project Manager acts for the Client on most matters, including instructions, compensation events and accepting the programme. The Supervisor deals with testing and defects.
Under NEC4 ECC clause 61.3, the Contractor notifies a compensation event within eight weeks of becoming aware that it has happened. If it does not, the Prices, Completion Date and Key Dates are not changed, unless it is an event the Project Manager should have notified.
The Contractor submits a quotation within three weeks of being instructed to. The Project Manager then replies within two weeks, unless a longer period is agreed.
Contract terms vary by edition and are frequently amended. Always check the contract and any project-specific amendments that apply. This guide is general information, not legal advice.
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