Claiming a Compensation Event deemed to be accepted

Hi,

Looking for some guidance. Was debating with a colleague about being paid for a CE event that had gone through the process (notified, reminded, no response and eventually deemed to be accepted). My colleague thought that because a CE event that was quoted was ignored, it meant that he was entitled to full payment when the client gave a zero cert against the item.

My stance was that the CE event was deemed to be accepted, but that doesn’t automatically mean we are entitled to payment for it. In this instance, the client queried the CE which we put 100% against and gave a zero cert on the payment app asking for further substantiation. My colleague maintained that it was deemed accepted and the client had to pay, I maintained the stance that he is not entitled to pay as it is separate from the CE process and although it was frustrating for us having to go back and send the same info we have already sent, he was acting within his rights…to which I have further fleshed out the CE’s in question.

Trust this makes sense.

Who is correct?

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If you have followed the process correctly of submitting your quotation, getting no response, sending a reminder notification and still getting no response, then your quotation is treated as being implemented and included in the activity schedule/BoQ.

So assuming you are under an option A or B contract, then you are fully entitled to apply for the value once the work has been done and to be paid. Any adjudication launched by you would not be on the value but on the basis that the PM has not followed due process and therefore you are entitled to your assessment, whether it is right or wrong … however, do try to work this out rather than go straight to adjudication !

I would have pointed you in the direction of the relevant clauses, but don’t know what main option you are under or whether you are under NEC3 or 4 (or even the ECC).

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Hi,

So he was correct…interesting. I must be missing something here as almost all quotes end with the “further substantiation needed”. The CE’s are submitted and dilligence is followed with breakdowns. It then comes to the payment app and the values get knocked back with “further substantiation needed” which i’m hesitant to give as we risk exposing commercial sensitivities and potentially harming future work.

We are on NEC 3, option A, ECS amended. Can you point me to the clauses in the unaltered version?

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From my reading, you are referring to deemed acceptance of the compensation event notice whilst you’re colleague is referring to deemed acceptance of the CE quote. Deemed acceptance of NCE or CEQ are both possible, for either to happen you would have to have notified the CE or issued the quotation, then reminded per contract timescales without a valid response.
A response by the PM in a payment certificate is likely not a valid response as it’s not communicated separately in accordance with requirements.
One further point worth checking is the timing of the CEQ in relation to acceptance or deemed acceptance of the NCE, if issued before acceptance/deemed acceptance the CEQ would potentially not be valid for purposes of triggering deemed acceptance of the CEQ, as this would have to follow acceptance of the NCE in my view.

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