Not as a separate head of claim: omitted work is an NEC compensation event, and it is assessed by reducing the Prices, with no added payment for the profit you expected to make. You do keep any margin in your price above the forecast Defined Cost and Fee of the omitted work, so the money question depends on how that work was priced.
This page covers NEC4 ECC. The sibling page on whether the Client can omit work deals with the power to do it; this one deals with the sum.
How the reduction is calculated
An instruction removing work from the Scope is a compensation event under 60.1(1). Normally a saving doesn't cut the Prices (63.3), but a Scope change is one of the stated exceptions, so 63.4 reduces them. The assessment follows 63.1: the effect on forecast Defined Cost, plus the resulting Fee. Clause 63.6 closes off anything else, as changes to the Prices and dates are the only rights for a compensation event.
So what comes off isn't your tendered price for the work. It's what the work would have cost you, plus the Fee on that cost. In NEC3 ECC the same logic runs through 63.2 and the main Option clause that reduces the Prices.
Worked example: where the margin goes
A fictional Option A school project, with illustrative figures and a 10% Fee. A landscaping activity is omitted before it starts.
| Priced with a healthy margin | Priced tight | |
|---|---|---|
| Activity price in the schedule | £120,000 | £90,000 |
| Forecast Defined Cost saved | £90,000 | £90,000 |
| Fee at 10% | £9,000 | £9,000 |
| Reduction in the Prices | £99,000 | £99,000 |
| Left with the Contractor for no work | £21,000 | Minus £9,000 |
The Contractor loses the Fee of £9,000 either way. Above that, its original pricing decides the result: the left-hand case retains the extra margin, and the right-hand case gives back more than it priced. People often assume the rate or lump sum comes straight off, and that's the first thing to check in any assessment you receive.
What to do when the omission lands
- Check the instruction also notifies a compensation event. The Project Manager should do this at the same time (61.1). If they don't, notify it yourself; the eight-week time bar doesn't apply to an instruction, but delay only hurts your evidence.
- Quote within three weeks of the instruction to quote (62.3, in NEC4 ECC; two weeks under NEC4 ECS). If you don't, the Project Manager can make its own assessment under 64.1.
- Count what you've already spent or committed. Materials ordered, cancellation charges, subcontract settlements and design already done all remain cost that the event doesn't save. They reduce the saving.
- Look at knock-on costs. Lost efficiency in remaining work, or site running costs that no longer spread as planned, belong in the forecast too, with the delay position if the sequence changes.
- Show your workings on the current Defined Cost basis, with a clear break between work done and work to come.
The main Option changes who feels it
| Option | Effect of an omission |
|---|---|
| A and B | The Prices drop by forecast Defined Cost plus Fee; retained margin stays with the Contractor, as in the example |
| C and D | The target falls the same way. The omission also removes that work's actual cost, so any margin in the target for it feeds into the share calculation |
| E | The work simply isn't done, so neither its Defined Cost nor its Fee is paid. The forecast of the total moves accordingly |
The main Options guide explains these payment routes.
What the Project Manager is likely to say
Expect the assessment to use your tender allowance if it was high and your forecast cost if it was low. The contract supports forecast cost, in either direction, so hold them to one basis. They may also say your commitments could have been cancelled sooner. Clause 63.9 assumes you react competently and promptly, so keep the record of when you stopped orders and told your supply chain.
When profit may be a wider issue
The contract's answer assumes the omission was a genuine change. If the work is being taken away to give to someone else, the question of whether the power extends that far is a legal one on your wording and facts, so take advice before accepting the assessment. If a large part of the job has gone, also check any Z clauses on omissions. Other reader questions are in NEC questions answered.
Related guides
- NEC Questions Answered: Real Situations on Site
- The Client Wants to Omit Work: Can They?
- The Drawings and Specification Disagree: Which One Applies?
- We Priced the Job Wrong: Can We Get It Changed?
- How Is Disruption Recovered Under NEC?
- Can We Submit One Global Claim for Everything?
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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.