# NEC3 Compensation event notified by the Contractor **URL:** \ **Category:** NEC3 and NEC4 Contracts\ **Created:** [3 April 2021 13:36 UTC](https://reachback.builtintelligence.com/t/nec3-compensation-event-notified-by-the-contractor/11485 "2021-04-03T13:36:50Z")\ **Posts on this page:** 5\ **Page:** 1
**Author:** ![davis.li](https://dub1.discourse-cdn.com/flex013/user_avatar/reachback.builtintelligence.com/davis.li/32/55_2.png) [@davis.li](https://reachback.builtintelligence.com/u/davis.li)\ **Post date:** [3 April 2021 13:36 UTC](https://reachback.builtintelligence.com/t/nec3-compensation-event-notified-by-the-contractor/11485/1 "2021-04-03T13:36:50Z")
Hi all, I have a question on how to deal with compensation events notified by the _Contractor_. A meeting was held amongst the _Project Manager_, the _Contractor_ and Others and a change in Works Information is expected, but the details are yet to be finalised. At this point, the _Contractor_ notified a compensation event in accordance with Clause 61.3. While the _Project Manager_ agrees that it is a compensation event, when he notifies the _Contractor_ this decision, the _Contractor_ is instructed to submit quotations at the same time. However, given that the details of the compensation event are not finalised, there is no basis for the _Contractor_ to prepare a quotation. In this case, how should the _Project Manager_ deal with it? Thanks! ---
**Author:** ![dave\_bates](https://dub1.discourse-cdn.com/flex013/user_avatar/reachback.builtintelligence.com/dave_bates/32/55_2.png) [@dave\_bates](https://reachback.builtintelligence.com/u/dave_bates)\ **Post date:** [4 April 2021 09:59 UTC](https://reachback.builtintelligence.com/t/nec3-compensation-event-notified-by-the-contractor/11485/2 "2021-04-04T09:59:27Z")
Welcome to the Group The answer will depend upon how much information is currently available. If substantial information is available then the PM could use Project Manager’s assumptions to fill the gaps. In that way the Contractor can provide a quotation for acceptance and if the assumption(s) prove not to be correct then they can be revisited in a further CE – see clause 61.6. Another option could be that the Parties agree to and extended period (agree period of time or a date) for the PM to reply to the specific notification – see clause 12.3, the agreement being captured in writing. Another option would be to flex the contract by the PM responding acknowledging the notification is correct (ie that that the matter is a CE) and that further details will be provided. ---
**Author:** ![davis.li](https://dub1.discourse-cdn.com/flex013/user_avatar/reachback.builtintelligence.com/davis.li/32/55_2.png) [@davis.li](https://reachback.builtintelligence.com/u/davis.li)\ **Post date:** [5 April 2021 02:03 UTC](https://reachback.builtintelligence.com/t/nec3-compensation-event-notified-by-the-contractor/11485/3 "2021-04-05T02:03:16Z")
Thanks Dave. Noted you have quoted Clause 12.3 for extending the _period for reply_ to the notification of compensation event, which needs to be “confirmed in writing and signed by the Parties”. I am wondering if extending the _period for reply_ to a particular communication requires signing off by the _Employer_ and the _Contractor_, or, only a notification is required from the _Project Manager_ once the agreement is made with the _Contractor_ behind the scenes under Clause 13.5. ---
**Author:** ![dave\_bates](https://dub1.discourse-cdn.com/flex013/user_avatar/reachback.builtintelligence.com/dave_bates/32/55_2.png) [@dave\_bates](https://reachback.builtintelligence.com/u/dave_bates)\ **Post date:** [5 April 2021 08:45 UTC](https://reachback.builtintelligence.com/t/nec3-compensation-event-notified-by-the-contractor/11485/4 "2021-04-05T08:45:48Z")
Hi Just for clarity it is not actually the period for reply that applies here because there is a stated period within the clause, 61.4, itself for the PM to respond. Please see clause 13.3, clause 13.5 would therefore not apply. To draw a comparison, see clauses 61.4 and 62.5 which allow for a longer period by agreement. Strictly, because the extension is not provided for in the contract, it would be a change to the contract. It may seem unnecessary because the parties are doing the right thing in discussing the change in advance, but will keep matters intact. If it is seen as too problematic then the PM could stretch clause 61.6 with a PM assumption that the matter will be addressed by future CE number ?? ---
**Author:** ![davis.li](https://dub1.discourse-cdn.com/flex013/user_avatar/reachback.builtintelligence.com/davis.li/32/55_2.png) [@davis.li](https://reachback.builtintelligence.com/u/davis.li)\ **Post date:** [5 April 2021 13:26 UTC](https://reachback.builtintelligence.com/t/nec3-compensation-event-notified-by-the-contractor/11485/5 "2021-04-05T13:26:43Z")
Understood, thanks a lot!