Yes, you can insist on it if you are on Option C, D or E, because the contractor forecast of total Defined Cost is a contract duty at the intervals in the Contract Data. But the contract applies no automatic money penalty for missing one, so your remedies are an instruction, your own view of the numbers and, at the far end, the default provisions.
Whether you have a duty to enforce at all depends on the main Option and whether Completion has passed. This page is part of our NEC questions answered.
Is a forecast actually due?
| Situation | Position |
|---|---|
| Option A or B | No forecast clause. Ask for one by agreement, or look at the programme and the register instead |
| Option C, D or E | Due at the Contract Data interval, from the starting date until all the works reach Completion, with an explanation of what changed |
| Option F | NEC3 applies the same duty. Check the Option F clauses in your NEC4 ECC |
| All the works have reached Completion | The duty has run its course. You need a different route, such as the final account process |
The clause is 20.4 in NEC3 ECC and 20.3 in the NEC4 subcontract, which applies the same rule to the Subcontractor. Z clauses and the Scope may ask for more, such as a set format or date in the month.
What to do now
- Pin down the dates. Find the interval in the Contract Data, the last forecast received and how many have been missed. There is no time bar for you to worry about, but the gap widens.
- Write through the Project Manager. Forecasts go to the Project Manager, so the reminder should come from there.
- Offer to consult. The forecast is prepared in consultation with the Project Manager. Book a session, so that "we were waiting for you" isn't available as an answer.
- Instruct if the reminder fails. The Contractor has to obey an instruction given in line with the contract (27.3). An instruction to send what the contract already requires changes nothing in the Scope, so it isn't a compensation event.
- Build your own view. Use the accounts and records you are entitled to inspect (52.3), the applications for payment and the compensation event register.
- Tell the Client what you don't know. Put the missing forecast on the report, with your own figure marked as yours.
Levers you have, and those you don't
The contract says a quarter of the value of work done is held back while no first programme has been sent (50.5). That rule covers programmes only, so don't borrow it for forecasts. Nothing in the amount due depends on a forecast of total Defined Cost, and holding money back on that ground isn't open to you.
Don't confuse the two forecasts either. The figure in each assessment under these Options is a short forecast to the next assessment date. The overdue one is the whole-of-the-works outturn.
In practice, the most effective pressure is on the things the Contractor needs from you:
- A standing item at the monthly commercial meeting.
- Closer checking of Defined Cost in applications, since you have less to rely on. Your rights to inspect records are in the open-book guide.
Termination for a substantial failure to comply (R11, under 91.2) exists, but it needs a notified default that stays unremedied, and a missed forecast alone is a long way from it. Take legal advice before going anywhere near it.
Sample wording
What the Contractor is likely to say
- "We can't forecast until you assess the compensation events." The forecast can state its assumptions and show open events separately. Unsettled items don't remove the duty, though they may be a fair point about accuracy.
- "The real figure is commercially sensitive." On these Options the Client pays on Defined Cost, so the cost is already open to review.
Why a silence is itself worth asking about
A Contractor that stops forecasting may simply have lost a commercial manager. It may also be sitting on a bad number. Under a target contract, an overspend affects both Parties through the share, so ask directly whether anything is coming that should be an early warning. A matter that could raise the total of the Prices belongs under NEC4 15.1, while the Contractor can also warn of one that could raise its own total cost.
Related guides
- NEC Questions Answered: Real Situations on Site
- New Regulations Mean Extra Work: Who Pays?
- Our Permit Has Been Delayed: Who Takes the Risk?
- The PM Refused to Accept Our Design: What Now?
- We Can Save the Client Money: How Do We Propose It?
- The Client's Budget Is Being Exceeded: What Controls Exist?
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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.