Clause 60.1(8) makes it a compensation event when the Project Manager or Supervisor changes a decision already communicated to the Contractor. The idea is simple: if the Contractor has been told something and may have acted on it, the Client pays for the effect of changing it.
The entry is the same in NEC3 and NEC4 ECC. Like other compensation events that arise from a communication, a changed decision comes under clause 61.1, which requires the Project Manager to notify it at the time, and the Contractor's eight-week time bar doesn't bite on it.
What triggers it
- A decision. An acceptance, a stated view on a submission, a confirmation of how something is to be done. A passing comment in a meeting is harder to rely on than something recorded.
- By the Project Manager or Supervisor. Including their delegates. A view from the Client's designer isn't covered unless the Project Manager has adopted it.
- Communicated to the Contractor. A decision reached internally and never passed on can be changed freely.
- Later changed. The new position has to be different in substance, rather than a fuller explanation of the old one.
A change of person doesn't reset anything. A replacement Project Manager inherits earlier decisions, so a new broom reversing what the predecessor accepted is a classic example of this event.
Where it meets other entries
| Situation | Better entry |
|---|---|
| The change alters what the Scope requires | 60.1(1), possibly with this one |
| Acceptance refused the first time, for a reason not in the contract | 60.1(9) |
| A notified Defect is withdrawn after the Contractor has started correcting it | This one, because the Supervisor's notification was a decision that changed |
| Acceptance given, then the work turns out not to comply with the Scope | No event; see below |
The trap: acceptance doesn't remove responsibility
Clause 14.1 says the Project Manager's or Supervisor's acceptance leaves the Contractor just as responsible for delivering the works, and just as liable for its design. So if the Project Manager accepted a design and the Supervisor later finds it doesn't comply with the Scope, that isn't automatically a changed decision. The work has a Defect, and the earlier acceptance doesn't change this.
The event arises where the earlier decision was within the Project Manager's choice, and is withdrawn for reasons other than non-compliance. The test is why the position has changed: is the work non-compliant, or does somebody just prefer something else now?
How it is usually evidenced
- The original communication, with its date.
- The later communication that changes it.
- What the Contractor did in reliance on the first: orders, fabrication, drawings, work on Site.
- Whether the Scope was met both before and after, which is what separates this from a Defect.
Worked example
A fictional apartment block on Option A, where the Contractor designs the precast stairs. Figures are illustrative. In April, the Project Manager accepts the design, which meets the Scope and applicable law. The Contractor orders the units. In May, a new Project Manager takes over, and reverses the acceptance because the Client prefers an in-situ finish at the lower landings.
| Effect | Defined Cost |
|---|---|
| Cancellation charges on landing units | £7,400 |
| Redesign of the lower landings by the Contractor's designer | £2,900 |
| In-situ landings, net of the precast omitted | £8,700 |
| Subtotal | £19,000 |
| Fee at an illustrative 10% | £1,900 |
| Change to the Prices | £20,900 |
The landings aren't on the critical path, since there's enough float ahead of the stair core. The Completion Date stays where it is. If the Client's finish was added to the Scope, the event could be expressed under both 60.1(1) and 60.1(8), but the effect is only assessed once.
Had the original design breached the fire strategy in the Scope instead, there would be no event. The redesign would be at the Contractor's cost, and the acceptance wouldn't help it.
How it is assessed
The dividing date is the day of the changed decision (63.1). Abortive cost before that date is actual Defined Cost, and new work after it is forecast. The Fee is added as for any other assessment. The two decisions may be weeks apart, so a tidy record of what had been ordered by the dividing date saves a lot of argument. If the change alters how the design interacts with other work, the time effect should be tested separately.
What people get wrong
- Using it for informal views. "We thought you were happy with it" isn't a decision. Get acceptances and confirmations in writing so there's something to rely on.
- Project Managers correcting a mistake without notifying. If you have changed your mind and it has an effect, it's an event, even if you feel you were wrong the first time.
- Treating it as a shield against Defects. Acceptance doesn't excuse non-compliance.
- Ignoring the Supervisor. Changed decisions on test procedures, hold points or notified Defects count too. Tell the Project Manager, so it can notify.
Related guides
- NEC Compensation Events: The Complete Guide
- Compensation Event: Withholding Acceptance for Other Reasons
- Compensation Event: Tests and Searches Finding No Defect
- Compensation Event: Test or Inspection Causing Delay
- Compensation Event: Late Reply to a Communication
- Compensation Event: Objects of Value or Interest Found
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