How is an instruction to stop Subcontractors works under option A for not having a Site Safety Supervisor on site dealt with if the Subcontractor raises a CE under CL 60.1(4)?

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Very simple - you assess if you agree that it is indeed a compensation event and that is not caused by the Contractor. Under clause 61.4, if you decide an event has occurred was the Contractors fault or was not a CE then you respond with a decision that the Prices, Completion or a Key Date are not to be changed.

Otherwise they would agree that it is a CE and request a quotation.