NEC ECC: Revisiting rejected Compensation Event Notification

The Contractor notified a compensation event under Cl.61.3, which was not accepted by the Project Manager as it was decided to have no effect upon Defined Cost or completion. The Project Managers decision was notified under Cl.61.4 and 18 weeks has now lapsed with no further communications on the matter.

The Contractor has now confirmed that they intend to submit a quotation for the event as they deem it to be a compensation event. Whilst the Project Manager is not required to consider a quotation which does not relate to an accepted compensation event, can the notification be revisited 18 weeks later?

Cl.61.3 requires the Contractor to notify a compensation event within eight weeks, otherwise entitlement is lost. However, the Contractor complied with this requirement within their initial notification. Therefore at what period of reply is revisiting rejected notifications still permitted within the contract?

If revisiting is permitted, how should the compensation event be assessed in terms of actual cost or forecast cost? At the time of initial notification, forecast cost was applicable but now that significant time has lapsed, would actual cost be applicable?

They can not submit a CE quote if the PM has not instructed them to do so - or even if they did the PM would ignore it on the basis that they did not agree it is a CE in the first place.

I do not see that the 8 week time-bar is relevant to an event that they have previously notified and was then rejected. The 8 weeks is to stop any surprises at the end of the project and if the PM had rejected a CE that could be later proven to be valid the 8 weeks does not apply here. It would then be assessed in accordance with 63.1 - which is an assessment of the forecast cost at the point the event was instructed or (originally) notified as a CE. It does not revert to simply now being assessed as actual cost, although had there been any actual cost before the event was instructed/notified then yes that element would be assessed at actual.

It is worthwhile pointing out that under clause 61.4, the PM did not say it was not a compensation event, only that it would have no effect upon Defined Cost or Completion. So you did notify within the 8 weeks and the PMs response turned out, you think, to be mistaken. There is nothing in the contract which stops you re-notifying and supplying sufficient evidence to demonstrate that it did cost you time and money, so that he or she can now instruct the quotation.