{
  "query": "NEC4 deemed acceptance compensation event impact PM failure to respond",
  "raw_results": [
    {
      "url": "https://www.lazyqs.co.uk/nec-clauses/guides/compensation-event-notification-process",
      "title": "How to Notify a Compensation Event Under NEC4 | Step-by-Step Guide | LazyQS",
      "content": "The PM fails to respond within one week. This is the deemed acceptance rule. If the PM does not reply within the one-week period, the notification is treated as accepted. If the response window expires without a reply, write to the PM noting that the one-week period has elapsed, that you are treating the notification as accepted under clause 61.4, and that you will proceed to submit a quotation. Create a clear documentary record of the timeline.\n\nClause 61.4 also gives the PM the option of deciding that the event has no effect on Prices, Completion Date, or Key Dates. This is not a rejection of the event as a CE — it is a finding that the CE has no compensation consequence. If you disagree with that finding, it can be challenged as a disputed PM assessment. [...] Contractor-initiated compensation events arise under clause 61.3. Where an event listed in clause 60.1 has occurred and the PM has not already notified it, the obligation to notify passes to you. This is the more commercially sensitive of the two routes, because failure to notify — or late notification — gives the PM the right to decide that the event is not treated as a compensation event. That decision extinguishes your claim entirely. The 8-week clock starts running from the point you become aware of the event, not when you choose to act on it. [...] The PM rejects the notification with reasons. The PM can notify you that the event is not a compensation event, giving reasons. Common grounds include: the event was already notified by the PM; the event does not fall within clause 60.1; the notification was submitted outside the 8-week period. A rejection does not extinguish your right to dispute the PM's decision — you can refer it to adjudication — but you cannot simply proceed as if the CE has been accepted. Respond promptly if you intend to challenge it.",
      "score": 0.8808076,
      "raw_content": null
    },
    {
      "url": "https://www.ceca.co.uk/wp-content/uploads/2024/03/CECA-NEC-Bulletin-No.-39-The-Role-Of-The-Project-Manager-March-2024-2.pdf",
      "title": "[PDF] The Role Of The Project Manager - CECA NEC4 Bulletin",
      "content": "contract conditions, • compensation event quotations, • revised activity schedule (for option A only), • additional Working Areas, • Contractor proposals, • quality management system, • whole life cost quotations, • insurance policies, • quotations to not accept a defect, • change in key person, • acceleration quotations. No response would not lead to an instant deemed acceptance but would be a compensation event under clause 60.1(6). Any impact that the non-response has in these instances would be recoverable by the Contractor as part of the resultant compensation event quotation for cost and time. There are two elements in the contract (programme and compensation events) where if there was no response by the Project Manager the Contractor can notify the lack of response. If there was a [...] Contractor can notify the lack of response. If there was a further period of non-response (one week for programme, two weeks for compensation events) then the associated programme or compensation event would be “deemed accepted” at that point. This is just to prevent a Project Manager from not responding, leaving the Contractor unsure of their liability for those elements. Project Manager Instructions: There are various elements the Project Manager may need to instruct, and clause 27.3 clarifies that the Contractor “obeys an instruction given by the Project Manager in accordance with the contract”. The only reason the Contractor could refuse an instruction is for something that was illegal or impossible (or outside of their competencies). Any instruction that is a change to the Scope or [...] not accepting, they instruct the Contractor to resubmit a quotation or make the statement they will assess it themselves. If the Contractor does not submit a quotation within the time permitted (3 weeks), then the Project Manager should make their own assessment (clause 64.1). The conclusion of the whole compensation event process is the Project Manager ‘implementing’ the event, confirming the cost and time impact upon the Prices and the Completion Date (and/or Key Dates). As already highlighted within this bulletin, it is essential the Project Manager makes this assessment objectively and in accordance with the rules of the contract as any formal dispute process could be very costly in terms of cost, time and relationships for the Client if proven incorrect.",
      "score": 0.86928266,
      "raw_content": null
    },
    {
      "url": "https://gmhplanning.co.uk/nec-downloads/nec4-common-misconceptions/",
      "title": "Common Misconceptions Associated when Administering NEC Contracts - CECA Bulletin 35",
      "content": "## Lack of response to something issued for acceptance\n\nIt could be assumed that if a Project Manager does not respond within the contractual timescale to a submission that is being issued for acceptance then it can be taken as being accepted (i.e. deemed accepted) but this is not the case. There are two processes (programme and compensation events) where failure to respond can lead to the Contractor notifying that there has been no response, and after a further period (one or two weeks) where that item would now be treated as having been accepted. [...] For all other matters, it would simply be a compensation event that the Project Manager has not responded within the timescale (60.1(6)), and any impact that has caused would be fully recovered as part of that compensation event quotation. For example, if design is issued for acceptance and not responded to within the period for reply, the Contractor will have to stop with any subsequent activities, and any impact that delay has on the Contractor as a result will be recoverable within a resultant compensation event quotation.\n\n## Acceptance of something by the Project Manager means a shift in liability",
      "score": 0.78611463,
      "raw_content": null
    },
    {
      "url": "https://www.gatherinsights.com/en/nec4/response-periods",
      "title": "NEC4 Response Periods: Complete Deadlines Guide",
      "content": "## Deemed Acceptance: When Silence Becomes Consent\n\nNEC4 contains specific provisions that treat a party's failure to respond as agreement to the other party's position. These are not general principles — they apply only where the contract explicitly creates the deeming mechanism. There are two in the CE process.\n\n| Situation | Deemed Outcome | Clause | Automatic? |\n ---  --- |\n| PM does not respond to CE notification within one week | Notification treated as accepted | 61.4 | Yes — no further action needed |\n| PM does not respond to CE quotation within two weeks | Quotation treated as accepted | 62.6 | No — Contractor must notify the PM |\n| PM does not respond to revised CE quotation within two weeks | Revised quotation treated as accepted | 62.6 | No — Contractor must notify the PM | [...] No. The eight-week notification requirement under clause 61.3 applies only to the Contractor. Events arising from PM or Supervisor actions — instructions, notifications, certificates, or changed decisions — are not subject to the Contractor time bar. The PM notifies these events under clause 61.1. Where the PM has its own response obligations (clauses 61.4 and 62.6), missed deadlines create deemed acceptance consequences rather than loss of entitlement. The PM does not lose the ability to assess a CE by missing their response window; they lose the ability to reject what the Contractor has submitted.\n\n### Can NEC4 response periods be extended? [...] 10 March (Day 7)\n\nThe PM has not responded to the CE notification. The one-week period under clause 61.4 has expired. The notification is treated as accepted. The PM can no longer reject the notification on the basis that the event is not a compensation event.\n\n11 March\n\nThe PM responds (one day late) and instructs the Contractor to submit quotations. The notification is already deemed accepted, so the PM's instruction to submit quotations proceeds. The Contractor's three-week quotation clock starts from the PM's instruction.\n\n1 April (Day 21 from PM instruction)\n\nThe Contractor submits a quotation for the access delay.",
      "score": 0.7760977,
      "raw_content": null
    },
    {
      "url": "https://www.fenwickelliott.com/research-insight/newsletters/insight/94",
      "title": "NEC Accepted Programmes: A Practical Guide - Fenwick Elliott",
      "content": "### What happens if the Project Manager does not respond?\n\nIf the Project Manager does not respond within two weeks, then there is a useful deeming provision provided within the NEC4 which, unfortunately, is not present in the NEC3.  After two weeks, the Contractor can submit a notice of failure to accept or reject the Accepted Programme under clause 31.3.  If the Project Manager remains silent after 1 week, then there is deemed acceptance of the programme.\n\nA flow chart showing the procedure for accepting the Accepted Programme is set out below (Figure 4) and applies to each revision as well.\n\nFigure 4 – Clause 31.3 Process – The Accepted Programme\n\nFigure 4 – Clause 31.3 Process – The Accepted Programme\n\nFigure 4 – Clause 31.3 Process – The Accepted Programme",
      "score": 0.7500592,
      "raw_content": null
    }
  ],
  "formatted": "Source: How to Notify a Compensation Event Under NEC4 | Step-by-Step Guide | LazyQS\nURL: https://www.lazyqs.co.uk/nec-clauses/guides/compensation-event-notification-process\nThe PM fails to respond within one week. This is the deemed acceptance rule. If the PM does not reply within the one-week period, the notification is treated as accepted. If the response window expires without a reply, write to the PM noting that the one-week period has elapsed, that you are treating the notification as accepted under clause 61.4, and that you will proceed to submit a quotation. Create a clear documentary record of the timeline. Clause 61.4 also gives the PM the option of deciding that the event has no effect on Prices, Completion Date, or Key Dates. This is not a rejection of the event as a CE — it is a finding that the CE has no compensation consequence. If you disagree with that finding, it can be challenged as a disputed PM assessment. [...] Contractor-initiated compensation events arise under clause 61.3. Where an event listed in clause 60.1 has occurred and the PM has not already notified it, the obligation to notify passes to you. This is the more commercially sensitive of the two routes, because failure to notify — or late notification — gives the PM the right to decide that the event is not treated as a compensation event. That decision extinguishes your claim entirely. The 8-week clock starts running from the point you become aware of the event, not when you choose to act on it. [...] The PM rejects the notification with reasons. The PM can notify you that the event is not a compensation event, giving reasons. Common grounds include: the event was already notified by the PM; the event does not fall within clause 60.1; the notification was submitted outside the 8-week period. A rejection does not extinguish your right to dispute the PM's decision — you can refer it to adjudication — but you cannot simply proceed as if the CE has been accepted. \n\n---\n\nSource: [PDF] The Role Of The Project Manager - CECA NEC4 Bulletin\nURL: https://www.ceca.co.uk/wp-content/uploads/2024/03/CECA-NEC-Bulletin-No.-39-The-Role-Of-The-Project-Manager-March-2024-2.pdf\ncontract conditions, • compensation event quotations, • revised activity schedule (for option A only), • additional Working Areas, • Contractor proposals, • quality management system, • whole life cost quotations, • insurance policies, • quotations to not accept a defect, • change in key person, • acceleration quotations. No response would not lead to an instant deemed acceptance but would be a compensation event under clause 60.1(6). Any impact that the non-response has in these instances would be recoverable by the Contractor as part of the resultant compensation event quotation for cost and time. There are two elements in the contract (programme and compensation events) where if there was no response by the Project Manager the Contractor can notify the lack of response. If there was a [...] Contractor can notify the lack of response. If there was a further period of non-response (one week for programme, two weeks for compensation events) then the associated programme or compensation event would be “deemed accepted” at that point. This is just to prevent a Project Manager from not responding, leaving the Contractor unsure of their liability for those elements. Project Manager Instructions: There are various elements the Project Manager may need to instruct, and clause 27.3 clarifies that the Contractor “obeys an instruction given by the Project Manager in accordance with the contract”. The only reason the Contractor could refuse an instruction is for something that was illegal or impossible (or outside of their competencies). Any instruction that is a change to the Scope or [...] not accepting, they instruct the Contractor to resubmit a quotation or make the statement they will assess it themselves. If the Contractor does not submit a quotation within the time permitt\n\n---\n\nSource: Common Misconceptions Associated when Administering NEC Contracts - CECA Bulletin 35\nURL: https://gmhplanning.co.uk/nec-downloads/nec4-common-misconceptions/\n## Lack of response to something issued for acceptance It could be assumed that if a Project Manager does not respond within the contractual timescale to a submission that is being issued for acceptance then it can be taken as being accepted (i.e. deemed accepted) but this is not the case. There are two processes (programme and compensation events) where failure to respond can lead to the Contractor notifying that there has been no response, and after a further period (one or two weeks) where that item would now be treated as having been accepted. [...] For all other matters, it would simply be a compensation event that the Project Manager has not responded within the timescale (60.1(6)), and any impact that has caused would be fully recovered as part of that compensation event quotation. For example, if design is issued for acceptance and not responded to within the period for reply, the Contractor will have to stop with any subsequent activities, and any impact that delay has on the Contractor as a result will be recoverable within a resultant compensation event quotation. ## Acceptance of something by the Project Manager means a shift in liability\n\n---\n\nSource: NEC4 Response Periods: Complete Deadlines Guide\nURL: https://www.gatherinsights.com/en/nec4/response-periods\n## Deemed Acceptance: When Silence Becomes Consent NEC4 contains specific provisions that treat a party's failure to respond as agreement to the other party's position. These are not general principles — they apply only where the contract explicitly creates the deeming mechanism. There are two in the CE process. | Situation | Deemed Outcome | Clause | Automatic? | --- --- | | PM does not respond to CE notification within one week | Notification treated as accepted | 61.4 | Yes — no further action needed | | PM does not respond to CE quotation within two weeks | Quotation treated as accepted | 62.6 | No — Contractor must notify the PM | | PM does not respond to revised CE quotation within two weeks | Revised quotation treated as accepted | 62.6 | No — Contractor must notify the PM | [...] No. The eight-week notification requirement under clause 61.3 applies only to the Contractor. Events arising from PM or Supervisor actions — instructions, notifications, certificates, or changed decisions — are not subject to the Contractor time bar. The PM notifies these events under clause 61.1. Where the PM has its own response obligations (clauses 61.4 and 62.6), missed deadlines create deemed acceptance consequences rather than loss of entitlement. The PM does not lose the ability to assess a CE by missing their response window; they lose the ability to reject what the Contractor has submitted. ### Can NEC4 response periods be extended? [...] 10 March (Day 7) The PM has not responded to the CE notification. The one-week period under clause 61.4 has expired. The notification is treated as accepted. The PM can no longer reject the notification on the basis that the event is not a compensation event. 11 March The PM responds (one day late) and instructs the Contractor to submit quotat\n\n---\n\nSource: NEC Accepted Programmes: A Practical Guide - Fenwick Elliott\nURL: https://www.fenwickelliott.com/research-insight/newsletters/insight/94\n### What happens if the Project Manager does not respond? If the Project Manager does not respond within two weeks, then there is a useful deeming provision provided within the NEC4 which, unfortunately, is not present in the NEC3. After two weeks, the Contractor can submit a notice of failure to accept or reject the Accepted Programme under clause 31.3. If the Project Manager remains silent after 1 week, then there is deemed acceptance of the programme. A flow chart showing the procedure for accepting the Accepted Programme is set out below (Figure 4) and applies to each revision as well. Figure 4 – Clause 31.3 Process – The Accepted Programme Figure 4 – Clause 31.3 Process – The Accepted Programme Figure 4 – Clause 31.3 Process – The Accepted Programme"
}