Skip to content

What does NEC4 clause 60.1(15) mean?

It makes early take-over of part of the works a compensation event, when it is certified before both Completion and the Completion Date.

Updated: . By Jack Butler-Kettle, Construction Claims Consultant.

The answer

Take-over is when the other side takes possession of part of the works to use it. In the NEC4 main contract the Project Manager certifies it. On an NEC subcontract your main contractor does. Both conditions must be met: the take-over comes before Completion of the whole works, and before the Completion Date. If you are late and a part is taken over after the Completion Date has passed, the clause does not apply. The other side is only taking what it should already have had. The event turns on the certificate, so get it. To rely on the clause, show the certificate, the part it covers, its date, and that both Completion and the Completion Date were later. The event comes from the other side's own certificate, so your main contractor should notify it when it certifies. If it does not, you notify under clause 61.3, and the 8-week bar does not apply. The change to the Prices, your contract price, is assessed under clause 63.1. It is the effect on actual Defined Cost up to the date of the certificate and forecast Defined Cost after it, plus the Fee. The effect is usually indirect. It can mean losing the area for access or storage, working around the occupiers, extra protection and separation, out-of-hours work, split commissioning and separate temporary services. Two things go wrong most. You treat early take-over as good news and quote nothing, then find the working conditions have changed and the 8 weeks have gone. Or the quotation includes the cost of finishing the part itself, which was always yours. Any delay to the Completion Date is assessed separately under clause 63, and that is a job for your planner.

Example

Illustrative example. The scenario and figures are invented.

The facts

A fit-out subcontractor on an Option A subcontract is working on a mixed-use building. The end client wants a ground floor shop trading before the rest is finished. The main contractor certifies take-over of the shop before both Completion and the Completion Date.

What happens

  1. The main contractor notifies the event with the certificate.
  2. The works above now have to be serviced without the shop's loading door.
  3. The fire alarm has to be split so the shop can run on its own system while the upper floors are built. A hoarding and a protected public route are needed too.
  4. The quotation assesses the temporary alarm separation and the new delivery route at £11,400, under clause 63.1.
  5. The hoarding, protected route and extra cleaning for the trading period come to £2,650.

The quotation in figures

ItemAmount
Alarm separation and alternative delivery route£11,400
Hoarding, protected route and cleaning£2,650
Change in Defined Cost£14,050

The outcome

The change in Defined Cost is £14,050, with the Fee added at the Contract Data percentage.

To have a refused event tested against the clause it falls under and pressed to implementation, see our Compensation Event Claim service.