NEC4: Defined Cost and Compensation Events explains how to manage compensation events, and the wider role that Defined Cost has within the NEC contract. The book shows how effective management of compensation events is central to the success of each contract, and the important role of Defined Cost both in compensation events and also routine payment assessments.
Focusing primarily on Defined Cost in the NEC4 Engineering and Construction Contract (ECC), the book provides stand-alone guidance for each of the six main options of the ECC, and also includes coverage of the Alliance Contract, DBO Contract, Professional Service Contracts, and the Term Service and Facilities Management Contracts. The assessment of time in compensation events, as it impacts upon the financial assessment is explained.
NEC4: Defined Cost and Compensation Events is an ideal companion for all those working in construction contracts, from the initial preparation of the contract, to the procurement, award, execution and management of disputes. It is essential reading for engineers, project managers, quantity surveyors, architects, lawyers and claims consultants.
Patrick Waterhouse's book provides valuable insight into the compensation event process and how to use and assess Defined Cost. He takes the reader through the steps to be followed in dealing with compensation events, including describing some pitfalls and how to avoid them. The book helpfully details how Defined Cost is used in all Options of the Engineering and Construction Contract, and summarises the approaches on the other NEC4 contracts.. This is a must read book for those preparing and operating NEC4 contracts.
Peter Higgins, Director at pdConsult, UK
About the author
List of abbreviations
02. What is the role of Defined Cost in NEC4 contracts?
03. What is a compensation event?
04. Compensation events 60.1(1) – 60.1(10)
05. Compensation events 60.1(11) – 60.1(21)
06. Compensation events in the main and secondary Options
07. Notifying compensation events, producing quotations and proposed instructions
08. Assessing and implementing compensation events
09. Time assessments of compensation events
10. What is Defined Cost?
11. Defined Cost and assessing compensation events in main Option A and Option B Contracts and the Short Schedule of Cost Components
12. Defined Cost in Main Option C, D and E contracts; Disallowed Cost and the Schedule of Cost Components
13. Main Option C, D and E contracts: assessment of Price for Work Done to Date and assessment of compensation events
14. Option F contracts: Defined Cost; Disallowed Cost; assessment of Price for Work Done to Date, and assessment of compensation events
15. Final assessments
16. Other NEC contracts
17. The effect of Z Clauses
18. Disputes concerning Defined Cost and compensation events
19. Defined Cost in termination