# NEC4 ECC: Option A Clause 63.4

**URL:** <https://reachback.builtintelligence.com/t/nec4-ecc-option-a-clause-63-4/5080>\
**Category:** Compensation Events\
**Created:** [21 May 2019 18:41 UTC](https://reachback.builtintelligence.com/t/nec4-ecc-option-a-clause-63-4/5080 "2019-05-21T18:41:16Z")\
**Posts on this page:** 2\
**Page:** 1

<div class="post-metadata">

**Author:** ![tregartha1](https://avatars.discourse-cdn.com/v4/letter/t/bc79bd/32.png) [@tregartha1](https://reachback.builtintelligence.com/u/tregartha1)\
**Post date:** [21 May 2019 18:41 UTC](https://reachback.builtintelligence.com/t/nec4-ecc-option-a-clause-63-4/5080/1 "2019-05-21T18:41:16Z")

</div>

The scenario – Adding in an ATM Machine into a brick wall and therefore the bricks are to be omitted from the Contractors Scope.

NEC 4 Clause 63.4 bullet point one how I read it is that a Compensation Event which is a change to the scope instructed by the client omitting works then the Prices are NOT reduced, the only way the prices can be reduced are by the Contractor proposing a VE option (63.12) that is then accepted by the client and the relevant VE % is applied.

Is this correct or am I reading this wrong?

---

<div class="post-metadata">

**Author:** ![Andrew\_W-I](https://dub1.discourse-cdn.com/flex013/user_avatar/reachback.builtintelligence.com/andrew_w-i/32/151_2.png) [@Andrew\_W-I](https://reachback.builtintelligence.com/u/Andrew_W-I)\
**Post date:** [23 May 2019 07:54 UTC](https://reachback.builtintelligence.com/t/nec4-ecc-option-a-clause-63-4/5080/2 "2019-05-23T07:54:14Z")

</div>

Clause 63.4 allows for the Prices to be reduced in the following situations;

- a change to the Scope,
- correction to a PM assumption.

The ‘qualification’ in the first bullet point refers to a Contractor proposal which has been accepted by the PM, which is then dealt with under clause 63.12 as a ‘value engineering’ proposal.

If the net effect on Defined Cost is that the Prices are reduced then they ARE reduced.