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Using the Programme to Assess Compensation Events

The NEC programme is the tool for working out the time effect of a compensation event. You take the Accepted Programme in force at the dividing date, add the event's effect, and measure how much later planned Completion and any planned Key Date becomes. That difference is the delay, and the Completion Date or Key Date moves by it.

The rule is NEC4 ECC 63.5 and NEC3 ECC 63.3, though the NEC3 version doesn't mention the dividing date. This page gives the method and the common failure points. The NEC programme guide gives the background, and compensation event delay goes through the principle in scenarios.

The method in six steps

  1. Fix the dividing date. For an instruction, notification, certificate or changed decision, it's the date of that thing. For other events, it's the date the event was notified (NEC4 63.1).
  2. Select the programme. Use the latest version accepted on or before the dividing date. Keep a record of which one and when it was accepted.
  3. Bring it up to date. NEC4 63.5 asks you to consider any delay the event has already caused on that programme and events between the programme's date and the dividing date. Progress to the dividing date, using real records.
  4. Add the event. Insert new or changed activities with realistic durations and logic, including risk allowances where justified (NEC4 63.8; NEC3 63.6).
  5. Measure. Compare planned Completion, and the planned date for each Key Date's Condition, before and after the event's effect is added.
  6. Submit. Include the delay in the quotation with the details of the assessment, together with any alterations to the programme for the remaining work (62.2).

An illustration

A fictional sewage works upgrade, with a dividing date of 1 October. The latest Accepted Programme, revision 11, has a data date of 1 September.

CheckPlanned Completion
As shown on revision 1131 March
Revision 11 brought up to 1 October with what actually happened (a two-week Contractor delay)14 April
The same, with the instruction's new tank added: 5 weeks' extra work on the critical path, plus 3 days' risk allowanceAround 22 May

The event's effect is the difference between the second and third rows, so about 5½ weeks, not the difference between revision 11's date and the third row. Without step 3, the Contractor's own delay would appear as part of the event. The Completion Date moves by the 5½ weeks; the Contractor's two weeks remain its own problem, unless it recovers them.

Does every event need a full programme run?

No. A short event with no critical effect can be explained in a short note, as long as the note shows float and logic. Larger events, or several overlapping ones, are where a programme update and native files pay off. Under 63.9 of NEC4 (NEC3 63.7), the assessment also assumes the Contractor reacts competently and promptly, and that any cost and time are reasonably incurred. So don't assume the longest possible method; show the one a competent contractor would use.

If there is no usable programme

SituationConsequenceClause
No Accepted Programme existsThe Project Manager assesses the remaining work's programme for the event64.2
A required programme or alteration wasn't submittedThe Project Manager assesses the event itself, using its own programme view64.1, 64.2
The latest programme wasn't accepted, for a listed reasonSame as above64.1, 64.2
A revision is awaiting a replyUse the Accepted Programme in force at the dividing date; show the pending revision for context63.5

The Project Manager's view may not match the Contractor's. Its figure will still be what's implemented unless challenged through the dispute process, and the Contractor loses the chance to make the first case. See Project Manager assessments.

Reviewing a programme submitted with a quotation

If you are on the Project Manager's side, use this short test:

  • Is it based on the right programme for the dividing date?
  • Is real progress applied up to that date?
  • Has logic been changed outside the event's activities? If so, why?
  • Do float figures change between the two runs in a way the event explains?
  • Are risk allowances in the event's activities justified, and not double counted?
  • Have Key Dates been checked as well as planned Completion?

A difference over any of these is a reason to discuss, ask for a revised quotation under 62.4, or carry out your own assessment under 64.1, depending on the circumstances. The quotations guide covers the steps and timings.

Assessments use forecasts of effect at the dividing date. Once implemented, an assessment isn't normally revisited because later events show the forecast was wrong (NEC4 66.3). So the programme you use has to be right at the time, because you normally get one attempt.

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.

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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.