{
  "query": "NEC4 contract rejection of quotation for lack of early warning clause 61.5 63.7",
  "raw_results": [
    {
      "url": "https://www.neccontract.com/news/do-what-nec4-ecc-says-or-face-the-%E2%80%98enforcement-clauses%E2%80%99?srsltid=AfmBOooRNGM-8tr-wEszWWuPNP8CrSBaG9r2Bw1ikX3GBFjqSEtSDo40",
      "title": "Do what NEC4 ECC says or face the ‘enforcement clauses’ | News | NEC Contracts",
      "content": "If the contractor has not given early warning of an event that subsequently becomes a compensation event, the project manager says so when instructing a quotation (clause 61.5). This is the ‘you should have told me’ clause. The compensation event is then assessed as if the contractor had given the early warning (clause 63.7). This is likely to result in a lower assessment of the compensation event. If the main option is for a cost-based contract (Option C, D, E or F), then any costs incurred because no early warning was given are also disallowed costs (clause 1.2(26/27)). If the project manager does not notify an early warning they are simply depriving the client of the chance for project manager and contractor to talk to each other to minimise the effect of the matter.\n\n60.1(3) [...] | 15.1 | Contractor notifies an early warning. | 61.5, 63.7,  Options CDEF  11.2(26) | If the contractor has not given early warning of an event that subsequently becomes a compensation event, the project manager says so when instructing a quotation (clause 61.5). This is the ‘you should have told me’ clause. The compensation event is then assessed as if the contractor had given the early warning (clause 63.7). This is likely to result in a lower assessment of the compensation event. If the main option is for a cost-based contract (Option C, D, E or F), then any costs incurred because no early warning was given are also disallowed costs (clause 1.2(26/27)). If the project manager does not notify an early warning they are simply depriving the client of the chance for project manager and [...] NEC4 ECC REFERENCE CLAUSE\n\nOBLIGATION\n\nNEC4 ECC ENFORCEMENT CLAUSE(S)\n\nEXPLANATION\n\n1. General\n\n15.1\n\nContractor notifies an early warning.\n\n61.5, 63.7,  \nOptions CDEF  \n11.2(26)",
      "score": 0.85538095,
      "raw_content": null
    },
    {
      "url": "https://coniston-associates.co.uk/take-notice-a-brief-guide-to-nec-contract-notices/",
      "title": "Take Notice! - A Brief Guide to NEC Contract Notices - Coniston Construction Associates Ltd - Construction Lawyers, Commercial & Contract Specialists",
      "content": "Clause 61.5: Notification of Contractor’s failure to give an early warning. If the Project Manager considers that the Contractor did not give an early warning which an experienced Contractor could have given, then the Project Manager states this at the point of requesting a quotation. The significance of this is that the Project Manager can then assess the subsequent compensation event as though the Contractor had given the early warning, which might mean the assessment has a lower value (refer to clause 63.7). [...] The Project Manager is motivated to give an early warning, to maximise the opportunity of involving the Contractor and finding the best solution to the problem and therefore keep the Client happy. It might be said that the Contractor’s motivation is similar – but he also has the potent incentive of protecting himself from the Project Manager imposing the sanction at NEC4 clause 63.7 (clause 63.5 in the NEC3) of the compensation event process, which provides:\n\n“If the Project Manager has stated in the instruction to submit quotations that the Contractor did not give an early warning of the event which an experienced contractor could have given, the compensation event is assessed as if the Contractor had given early warning”. [...] Clause 62.6: If the Project Manager does not reply to a quotation within the time allowed, the Contractor may notify the Project Manager of his failure. If the Project Manager continues to fail to reply for 2 weeks after that notification, then the Contractor’s original quotation will be treated as accepted.\n\nClause 64.3: The Project Manager notifies the Contractor of his assessment of a compensation event.\n\nClause 65.2: Notification that a Contractor’s quotation for a proposed instruction is not accepted.\n\nClause X22.5: Notice to proceed to Stage Two.\n\nClause Y2.2: The Project Manager’s certificate is the notice of payment.\n\n### Notices from Supervisor\n\nThe NEC4 ECC contract includes the following clauses in respect of contractual notices from the Supervisor:",
      "score": 0.8116913,
      "raw_content": null
    },
    {
      "url": "https://www.necplanningsolutions.co.uk/post/7-common-pitfalls-when-managing-compensation-events-in-nec4-as-a-contractor",
      "title": "7 Common Pitfalls When Managing NEC4 Compensation Events as a Contractor",
      "content": "Why it hurts under NEC4\n\nIf the contractor failed to give an early warning of an event that becomes a compensation event, the PM can state that when instructing a quotation (clause 61.5), and the CE is assessed as if the early warning had been given (clause 63.7). In practice, that can reduce the CE assessment.\n\nAlso, NEC guidance is clear that compensation events are assessed assuming the contractor acts promptly and competently (63.7). Waiting for agreement before acting can backfire commercially.\n\nFix\n\nLink EWNs to CEs in your registers.\n\nWhen an EWN is issued, log dated mitigation actions and decision-by dates.\n\nReflect mitigation in the programme, even if it is provisional. A mitigation that is not planned is rarely treated as credible. [...] | 4. Quotation submitted without a programme story | Spreadsheet plus narrative, no impacted chain | Endless “revise and resubmit” | Decision Pack: programme extract, assumptions, evidence index |\n| 5. Early Warnings not used properly | EWN forgotten, no risk reduction actions | Lower assessment under 63.7 | EWN linked to CE, mitigation actions logged and programmed |\n| 6. Forecast cost done badly | Actuals only, no risk, no time-related cost logic | Money left on the table | Forecast based build-up tied to programme and mitigation |\n| 7. Weak audit trail | Missing contemporaneous records and version control | Negotiated down, delayed payment | Evidence index, strict file naming, programme version register | [...] Discuss Your Project\n\nReferences\n\n1) NEC Contracts (FAQ): Time-barred compensation events (clauses 61.1 and 61.3)\n\n2) NEC Contracts (FAQ): Using the correct programme (dividing date and clause 63.5)\n\n3) NEC Contracts (News): “Do what NEC4 ECC says or face the ‘enforcement clauses’” (links clause 61.5 and 63.7 to early warning behaviour)\n\n4) NEC Contracts (Practice Note): Assessing delays due to compensation events (Accepted Programme logic, mitigation, out-of-date programme approach)\n\n5) King’s College London (News): 2024 Construction Adjudication in the UK report launch (record referral levels and leading causes)",
      "score": 0.8098936,
      "raw_content": null
    },
    {
      "url": "https://www.gatherinsights.com/en/nec4/early-warnings",
      "title": "NEC4 Early Warnings: Clause 15 Guide for Contractors",
      "content": "## The sanction: clause 63.7\n\nClause 63.7 is not automatic. It requires the Project Manager to state, in the instruction to submit quotations, that the Contractor did not give an early warning of the event which an experienced contractor could have given. If the PM does not include this statement in the instruction, the sanction does not apply. The assessment itself is based on the effect on Defined Cost from the dividing date, using the Accepted Programme current at that date. [...] An early warning often precedes a compensation event. Unexpected ground conditions might first appear as an early warning when trial pits reveal anomalies. If those conditions later affect the Contractor's programme or costs, a formal CE notification under clause 61 is required separately.\n\nGiving an early warning does not start the eight-week time bar. That clock starts only when the Contractor becomes aware the compensation event has occurred. But failing to give an early warning has its own consequences under clause 63.7.\n\n## The sanction: clause 63.7 [...] ### What is the penalty for not giving an early warning?\n\nUnder clause 63.7, the Project Manager can state in the instruction to submit quotations that the Contractor did not give an early warning which an experienced contractor could have given. When invoked, the compensation event is assessed as if the Contractor had given early warning at the appropriate time. The assessment considers what mitigation could have been achieved, and the CE entitlement is reduced accordingly.\n\n### Is there a time limit for giving an early warning?",
      "score": 0.8051581,
      "raw_content": null
    },
    {
      "url": "https://necstorageprod.blob.core.windows.net/mediacontainer/nec/media/nec/products/events/ap%20ug%20conferences%20and%20workshops/presentations/presentations2015/09-pm_dga-managing-risks-and-compensation-events.pdf",
      "title": "Managing Risks and Compensation Events – A Practical Case ...",
      "content": "stated in the Works Information. Project Timeline – Week 27 Did the Contractor give an early warning? 64 NO! – So when the Project Manager requests a quotation: Clause 61.5 If the Project Manager decides that the Contractor did not give an early warning of the event which an experienced Contractor could have given, he notifies this decision to the Contractor when he instructs him to submit quotations. Why does he do this? Project Timeline – Week 27 Did the Contractor give an early warning? 65 When the Project Manager receives the quotation: Clause 62.3 …The Project Manager replies within two weeks…His reply is • A notification that he will be making his own assessment Clause 64.1 The Project Manager assesses a compensation event • If the Project Manager decides that the Contractor has not",
      "score": 0.5717911,
      "raw_content": null
    }
  ],
  "formatted": "Source: Do what NEC4 ECC says or face the ‘enforcement clauses’ | News | NEC Contracts\nURL: https://www.neccontract.com/news/do-what-nec4-ecc-says-or-face-the-%E2%80%98enforcement-clauses%E2%80%99?srsltid=AfmBOooRNGM-8tr-wEszWWuPNP8CrSBaG9r2Bw1ikX3GBFjqSEtSDo40\nIf the contractor has not given early warning of an event that subsequently becomes a compensation event, the project manager says so when instructing a quotation (clause 61.5). This is the ‘you should have told me’ clause. The compensation event is then assessed as if the contractor had given the early warning (clause 63.7). This is likely to result in a lower assessment of the compensation event. If the main option is for a cost-based contract (Option C, D, E or F), then any costs incurred because no early warning was given are also disallowed costs (clause 1.2(26/27)). If the project manager does not notify an early warning they are simply depriving the client of the chance for project manager and contractor to talk to each other to minimise the effect of the matter. 60.1(3) [...] | 15.1 | Contractor notifies an early warning. | 61.5, 63.7, Options CDEF 11.2(26) | If the contractor has not given early warning of an event that subsequently becomes a compensation event, the project manager says so when instructing a quotation (clause 61.5). This is the ‘you should have told me’ clause. The compensation event is then assessed as if the contractor had given the early warning (clause 63.7). This is likely to result in a lower assessment of the compensation event. If the main option is for a cost-based contract (Option C, D, E or F), then any costs incurred because no early warning was given are also disallowed costs (clause 1.2(26/27)). If the project manager does not notify an early warning they are simply depriving the client of the chance for project manager and [...] NEC4 ECC REFERENCE CLAUSE OBLIGATION NEC4 ECC ENFORCEMENT CLAUSE(S) EXPLANATION 1. General 15.1 Contractor notifies an early warning. 61.5, 63.7, Options CDEF 11.2(26)\n\n---\n\nSource: Take Notice! - A Brief Guide to NEC Contract Notices - Coniston Construction Associates Ltd - Construction Lawyers, Commercial & Contract Specialists\nURL: https://coniston-associates.co.uk/take-notice-a-brief-guide-to-nec-contract-notices/\nClause 61.5: Notification of Contractor’s failure to give an early warning. If the Project Manager considers that the Contractor did not give an early warning which an experienced Contractor could have given, then the Project Manager states this at the point of requesting a quotation. The significance of this is that the Project Manager can then assess the subsequent compensation event as though the Contractor had given the early warning, which might mean the assessment has a lower value (refer to clause 63.7). [...] The Project Manager is motivated to give an early warning, to maximise the opportunity of involving the Contractor and finding the best solution to the problem and therefore keep the Client happy. It might be said that the Contractor’s motivation is similar – but he also has the potent incentive of protecting himself from the Project Manager imposing the sanction at NEC4 clause 63.7 (clause 63.5 in the NEC3) of the compensation event process, which provides: “If the Project Manager has stated in the instruction to submit quotations that the Contractor did not give an early warning of the event which an experienced contractor could have given, the compensation event is assessed as if the Contractor had given early warning”. [...] Clause 62.6: If the Project Manager does not reply to a quotation within the time allowed, the Contractor may notify the Project Manager of his failure. If the Project Manager continues to fail to reply for 2 weeks after that notification, then the Contractor’s original quotation will be treated as accepted. Clause 64.3: The Project Manager notifies the Contractor of his assessment of a compensation event. Clause 65.2: Notification that a Contractor’s quotation for a proposed instruction is not accepted. Clause X22.5: Notice to proc\n\n---\n\nSource: 7 Common Pitfalls When Managing NEC4 Compensation Events as a Contractor\nURL: https://www.necplanningsolutions.co.uk/post/7-common-pitfalls-when-managing-compensation-events-in-nec4-as-a-contractor\nWhy it hurts under NEC4 If the contractor failed to give an early warning of an event that becomes a compensation event, the PM can state that when instructing a quotation (clause 61.5), and the CE is assessed as if the early warning had been given (clause 63.7). In practice, that can reduce the CE assessment. Also, NEC guidance is clear that compensation events are assessed assuming the contractor acts promptly and competently (63.7). Waiting for agreement before acting can backfire commercially. Fix Link EWNs to CEs in your registers. When an EWN is issued, log dated mitigation actions and decision-by dates. Reflect mitigation in the programme, even if it is provisional. A mitigation that is not planned is rarely treated as credible. [...] | 4. Quotation submitted without a programme story | Spreadsheet plus narrative, no impacted chain | Endless “revise and resubmit” | Decision Pack: programme extract, assumptions, evidence index | | 5. Early Warnings not used properly | EWN forgotten, no risk reduction actions | Lower assessment under 63.7 | EWN linked to CE, mitigation actions logged and programmed | | 6. Forecast cost done badly | Actuals only, no risk, no time-related cost logic | Money left on the table | Forecast based build-up tied to programme and mitigation | | 7. Weak audit trail | Missing contemporaneous records and version control | Negotiated down, delayed payment | Evidence index, strict file naming, programme version register | [...] Discuss Your Project References 1) NEC Contracts (FAQ): Time-barred compensation events (clauses 61.1 and 61.3) 2) NEC Contracts (FAQ): Using the correct programme (dividing date and clause 63.5) 3) NEC Contracts (News): “Do what NEC4 ECC says or face the ‘enforcement clauses’” (links clause 61.5 and 63.7 to early warning \n\n---\n\nSource: NEC4 Early Warnings: Clause 15 Guide for Contractors\nURL: https://www.gatherinsights.com/en/nec4/early-warnings\n## The sanction: clause 63.7 Clause 63.7 is not automatic. It requires the Project Manager to state, in the instruction to submit quotations, that the Contractor did not give an early warning of the event which an experienced contractor could have given. If the PM does not include this statement in the instruction, the sanction does not apply. The assessment itself is based on the effect on Defined Cost from the dividing date, using the Accepted Programme current at that date. [...] An early warning often precedes a compensation event. Unexpected ground conditions might first appear as an early warning when trial pits reveal anomalies. If those conditions later affect the Contractor's programme or costs, a formal CE notification under clause 61 is required separately. Giving an early warning does not start the eight-week time bar. That clock starts only when the Contractor becomes aware the compensation event has occurred. But failing to give an early warning has its own consequences under clause 63.7. ## The sanction: clause 63.7 [...] ### What is the penalty for not giving an early warning? Under clause 63.7, the Project Manager can state in the instruction to submit quotations that the Contractor did not give an early warning which an experienced contractor could have given. When invoked, the compensation event is assessed as if the Contractor had given early warning at the appropriate time. The assessment considers what mitigation could have been achieved, and the CE entitlement is reduced accordingly. ### Is there a time limit for giving an early warning?\n\n---\n\nSource: Managing Risks and Compensation Events – A Practical Case ...\nURL: https://necstorageprod.blob.core.windows.net/mediacontainer/nec/media/nec/products/events/ap%20ug%20conferences%20and%20workshops/presentations/presentations2015/09-pm_dga-managing-risks-and-compensation-events.pdf\nstated in the Works Information. Project Timeline – Week 27 Did the Contractor give an early warning? 64 NO! – So when the Project Manager requests a quotation: Clause 61.5 If the Project Manager decides that the Contractor did not give an early warning of the event which an experienced Contractor could have given, he notifies this decision to the Contractor when he instructs him to submit quotations. Why does he do this? Project Timeline – Week 27 Did the Contractor give an early warning? 65 When the Project Manager receives the quotation: Clause 62.3 …The Project Manager replies within two weeks…His reply is • A notification that he will be making his own assessment Clause 64.1 The Project Manager assesses a compensation event • If the Project Manager decides that the Contractor has not"
}