This compensation event template gives you two versions of a notice for an NEC contract: one for the Contractor under clause 61.3, and one for the Project Manager under 61.1 and 61.2. The wording is our own sample, not NEC text, and is written for the NEC4 Engineering and Construction Contract (ECC).
NEC doesn't prescribe a format, so if the Scope sets a system or form, use that. For the procedure behind the notice, see the guide to notifying a compensation event. More templates are collected under managing NEC contracts.
Version 1: Contractor's notice (61.3)
| Notification of a compensation event | Clause 61.3 of the conditions of contract |
|---|---|
| Contract | [Name and number] |
| Reference | CE-[number] |
| Date | [Date issued] |
| From / To | Contractor: [name] / Project Manager: [name] |
| The event | We notify you of the following event, which we believe is a compensation event: [what has happened or is expected to happen; where; who was involved]. |
| Which event | Clause 60.1([number]), or [other clause], because [one line explaining why]. |
| Date we became aware | [Date, and how] |
| Has it happened yet? | [Yes, on (date) / Expected on (date)] |
| Related records | [Early warning reference, instruction, drawing, diary entry, photo] |
| Early effects we can see | [Brief, without prejudice to the quotation, or "not yet known"] |
| Reply | Please reply under clause 61.4. We make the reply due on [date]. |
Version 2: Project Manager's notice (61.1, 61.2)
| Notification of a compensation event | Clauses 61.1 and 61.2 of the conditions of contract |
|---|---|
| Contract | [Name and number] |
| Reference | CE-[number] |
| Date | [Same date as the instruction or other communication that causes it] |
| From / To | Project Manager: [name] / Contractor: [name] |
| The event | We notify you that our [instruction/notification/certificate/changed decision] [reference] is a compensation event under clause 60.1([number]). |
| Instruction to quote | Please submit quotations by [date]. [Or: We are not asking for quotations, because (one of the reasons in 61.2).] |
| Assumptions, if any | [Only if the effects are too uncertain to forecast: the assumptions to use, under 61.6.] |
| Early warning point, if any | [Only if you have decided an experienced contractor could have warned of this, under 61.5.] |
The 61.5 line belongs in this instruction, so decide on it before you issue the notice.
A completed example
This example is entirely fictional.
| Contract | Ashgrove Primary School Extension, AG/118 |
|---|---|
| Reference | CE-009 |
| From / To | Contractor's Commercial Manager to Project Manager |
| The event | On Tuesday our groundworks team found an old brick culvert running through the footprint of block B, about 1.2m deep. It isn't shown in the Site Information. We have stopped excavation at that location. |
| Which event | Clause 60.1(12). We believe an experienced contractor would have judged it unlikely enough, at the Contract Date, that allowing for it wouldn't have been reasonable. |
| Date we became aware | Tuesday of this week. Site diary entry 214. |
| Has it happened yet? | Yes |
| Related records | EW-012, photos 1 to 6 |
| Early effects we can see | Delay to block B foundations of perhaps one to two weeks. Cost not yet known. |
| Reply | Please reply under clause 61.4 within the week allowed. |
More on this category at physical conditions. Note that the notice says what the Contractor believes, and doesn't try to prove the whole case. Detail comes later, in the quotation.
Adapting the template
| Contract | Change |
|---|---|
| NEC3 ECC | Use Employer and Works Information. The Project Manager's instruction to quote is in 61.1, and the awareness wording differs |
| NEC4 subcontract (ECS) | Contractor and Subcontractor, with seven weeks to notify and two weeks to reply |
| Term service or professional service forms | Use the Service Manager, check the event numbering, and change "Completion Date" to your form's term |
| Amended contracts | Any Z clause may add content a notice has to contain, so check it first |
Tips for using it
- Send it soon. The eight weeks in clause 61.3 run from awareness, so don't wait for a full cost picture.
- Keep it separate from the early warning. A warning isn't a notification, even if it deals with the same facts. Issue both.
- Name the event, but stay open. If more than one 60.1 event might apply, say so. The route is the same whichever it is, although some events, such as physical conditions, count only in part.
- Enter the reply date in your tracker. Otherwise, you will not spot a missed reply under 61.4.
Related guides
- Managing NEC Contracts: A Practical Guide
- Compensation Event Quotation Template
- Project Manager Instruction Template
- Programme Submission Template
- The Registers Every NEC Contract Needs
- NEC Letter Templates: What to Include
How this looks in Contract Status
The record shows the date you became aware and how long you took to notify. See the worked example.
See how this works in practice
Click through Contract Status with sample contracts: raise the notice, reply to it, and watch both sides of one record.
Take the guided tour Book a demo
Get free NEC templates, use the free NEC tools or download free NEC templates.
This guide is general information in our own words, not legal advice. Your contract and its Contract Data always govern. NEC, NEC3 and NEC4 are trade marks of Thomas Telford Ltd; Contract Status is not affiliated with or endorsed by NEC.