What does NEC4 clause 60.1(8) mean?
It makes it a compensation event when a decision already given to you is changed.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
The answer
In the NEC4 main contract the decision is the Project Manager's or the Supervisor's. On an NEC subcontract it is your main contractor's. Show two things. First, a decision given to you in the form the contract requires, which means in writing and separate from other communications. Second, a later communication that changes it. A decision is wider than an instruction. It includes accepting a design or a subcontractor, agreeing a method, or a decision on a test result. The clause does not ask whether the change was reasonable, only whether it happened. The fault filter comes at clause 61.4. So a decision changed because your own information was wrong gives no change to the Prices. Because the event comes from its own communication, your main contractor should notify it when it communicates the change. 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 for work done by the date of the communication. Add forecast Defined Cost for work still to do, plus the Fee. So it covers the wasted work done on the first decision, as well as the cost of doing it the second way. Two things go wrong most. The first decision was only verbal, or buried in meeting minutes, and is then denied. Or you claim the whole cost of the second approach, not the difference the change made. 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
An electrical subcontractor asks the main contractor whether cable containment in the ground floor corridors may be surface mounted above the ceiling line. The main contractor decides in writing that it may. Four corridors are installed that way.
What happens
- The main contractor then changes its decision: the containment must be hidden in the ceiling void. It notifies the event with the change.
- The quotation assesses stripping out the surface-mounted runs already installed at £9,800, under clause 63.1.
- It adds the extra cost of the hidden installation over the surface-mounted one at £6,200, a change in Defined Cost of £16,000.
- With a fee percentage of 7 per cent, the Fee is £1,120 and the proposed change to the Prices is £17,120.
- The quotation attaches the first written decision, the record of the installed corridors and the second communication.
The quotation in figures
| Item | Amount |
|---|---|
| Stripping out the installed runs | £9,800 |
| Concealed installation over surface mounted | £6,200 |
| Change in Defined Cost | £16,000 |
| Fee at 7 per cent | £1,120 |
| Change to the Prices | £17,120 |
The outcome
The quotation goes in at £17,120 with the two decisions and the installation record attached, so the sequence is not in dispute.
To have a refused event tested against the clause it falls under and pressed to implementation, see our Compensation Event Claim service.