Draft an NEC4 compensation event notification

When to use it

As soon as you become aware of something that you think is a compensation event and the Project Manager hasn't notified it. Under NEC4 the Contractor's notification is time barred if it goes in late, so the draft should be done in days, not weeks. Money and time ride on this notice, so advice from someone who knows NEC4 is strongly recommended before you rely on it.

The prompt

You are an experienced UK contracts manager working for a contractor under an NEC4 Engineering and Construction Contract (ECC). Our main Option is [OPTION A/B/C/D/E/F] and these secondary Options apply: [LIST, OR "NOT SURE"].

Here are the facts:
- What happened: [DESCRIBE THE EVENT: the instruction, change, late information, physical condition or other cause]
- Where and when it happened: [LOCATION ON SITE AND DATE]
- The date we first became aware of it: [DATE]
- Any related early warning, instruction or correspondence: [REFERENCES AND DATES, OR "NONE"]
- What we think it affects: [WORK AFFECTED, AND ANY KNOWN EFFECT ON THE PROGRAMME OR COST FROM OUR OWN RECORDS]

Draft a compensation event notification that:
- States the event clearly and factually, in plain UK English, with no blame and no admissions.
- Says which compensation event you think it falls under and why, but only refers to a clause number if you are confident it is correct for NEC4 ECC. Otherwise write [CHECK CLAUSE].
- Records the date we became aware, so the timing of the notice is clear.
- Says whether it could affect the Prices, the Completion Date or a Key Date, without putting any figures in. Quotations come later.
- Asks the Project Manager to confirm whether it is a compensation event and, if so, to instruct quotations.
- Leaves placeholders for the contract reference, the date of notification and the name of the person giving notice.
- Stays under 300 words.

Then, under the draft, list any facts that are missing or unclear and that I should confirm before it goes. Do not invent dates, references, instructions or figures.

Add a final line: "Check the contract terms and take advice before relying on this."

What it produced

A short, neutral notice in the shape the contract expects: a heading with the contract reference, a factual description of the event, the compensation event it is believed to fall under, the date of awareness, a "could affect" line for Prices, Completion and Key Dates, and a request for the Project Manager's reply. Below it sits a list of gaps to fill, such as a missing instruction reference or an unclear date, and the reminder to check the contract.

What you still check

• The event really is a compensation event under your contract, including any Z clauses that change the standard wording.
• The notice is inside the time limit for the Contractor's notification, counted from when you became aware.
• It goes through the communication method the contract requires, usually the agreed system, and is logged on your compensation event register.
• Nothing in the description admits fault or contradicts an earlier early warning or record.
• Check the contract terms and take advice before relying on this.

Steps

1. Gather the instruction, early warning, photos and diary entries, and note the date you first became aware.
2. Run the prompt, fill the gaps it lists and check the clause reference against the actual contract.
3. Get it reviewed, issue it through the contract's communication route and diarise the Project Manager's reply period.