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Is it a valid compensation event? · Module 1 · Lesson 3 of 4

Test the instruction against the Scope

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Why it matters

Of Dana's two May messages, only one cost GBP 18,315

Dana Whitfield is the Project Manager, Raj Patel Merrow Vale's planner. Which message changed the Scope?

  1. Tue 5 MayShe says bars Raj's Sunday 17 May pour.
  2. Mon 11 MayShe limits Mill Lane heavy vehicles at school times.

Source: ECC 11.2(16), 60.1(1).

The rule

Compare the instruction with the Scope as it stood just before it

Three comparisons are common and wrong. Judge each, then open it.

“The Project Manager gives an instruction changing the Scope” (60.1(1))

Compare it with the price?

No. Under the Activity Schedule is not Scope (Option C 55.2).

With the programme?

No. Accepting a programme changes nothing in the Scope (14.1).

With what was said at tender?

No, unless a listed document holds it (11.2(16)).

With the Scope just before?

Yes. The listed documents and every earlier instruction. This is the test.

Source: ECC 11.2(16), 14.1, 60.1(1). ECC Option C 55.2.

The rule

Adding, removing or altering is a change, and repeating the Scope is not

A removed choice counts too. It adds a constraint.

ChangeIt adds

A new requirement or .

ChangeIt removes

Work taken out, or a choice removed.

ChangeIt alters

What the Scope describes or limits.

No changeIt repeats

What the Scope already says.

Source: ECC 11.2(16), 60.1(1).

The rule

Settle the change before arguing about cost

Still valid with no effect. It needs no quotation.

“has no effect upon Defined Cost, Completion or meeting a Key Date” (61.2)

  1. 1

    Does it change the Scope?

    If no:
    Not a 60.1(1) event
    If yes, go on to question 2.
  2. 2

    Any effect on cost or time?

    If no:
    Valid, no quotation
    If yes, go on to the outcome.
  3. Valid, quotations instructed

Source: ECC 60.1(1), 61.2, 63.1.

See it on the project

Dana's 11 May instruction alters a constraint, so it changes the Scope

Leila, Merrow Vale's commercial manager, puts the beside the Scope just before it.

The Scope just beforeDana's instruction
VehiclesChangedDeliveriesVehicles over 7.5 tonnes
WhereChangedThe Mill Lane entranceThe whole of Mill Lane
MorningChanged08:15 to 09:0008:00 to 09:15
AfternoonNewNo limit14:45 to 15:45
DaysSameSchool daysSchool days

Dana notified CE012 that day. The quotation of GBP 18,315 ( GBP 16,500 plus the at 11%) was accepted on 3 June.

Source: ECC 11.2(16), 60.1(1), 61.1, 61.2, 63.1.

Try it

Sort six Aldermere cases into compensation event or not

Run the test on each case. The reason shows after each answer.

Case 1 of 6

…

Source: ECC 13.1, 13.2, 14.2, 14.3, 60.1(1).

Quick check · Try it

Two questions on what you have just covered

Sunday, then cost.

Quick checkPick an answer to see if you are right and why
1Is Dana's 5 May reply on Sunday work a compensation event?
No, as the Scope barred Sunday work already
Yes, as the tender price assumed the pour
Yes, as it changes a decision under 60.1(8)
2Say Dana changes the kiosk door colour at no cost. Is it valid?
Yes, but Dana asks for no quotation
No, because nothing costs any more
Only if Merrow Vale can show a delay

2 questions to answer

Source: ECC 11.2(16), 14.1, 31.3, 60.1(1), 60.1(8), 61.2, 63.1. ECC Option C 55.2.

Recap

Put each instruction beside the Scope just before it, never beside the price

Three habits for Monday. Go deeper has a model notice.

On Monday at work

  • Write the Scope clause next to each instruction before anyone discusses cost.
  • Mark what the instruction adds, removes or alters.
  • Send a 61.3 notification if Dana has not notified the change.

In the Toolkit: NEC4 ECC Notice Letters (zip) Members

Next lesson: Drafting that starts the argument

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Independent course material. It is not published or endorsed by NEC. Clause references are to the NEC4 Engineering and Construction Contract, June 2017 with amendments January 2023. The project and the people are invented. Short quotes from NEC4 (© NEC 2017) and the FIDIC Red Book (© FIDIC 2017) are used for review and comment. Read the full clauses in your own copy of the contract.

Source: ECC 11.2(16), 60.1(1), 61.1, 61.3.

Go deeper (optional)

Grey areas turn on the Scope, not the price

Three questions practitioners ask.

Dana picked one of two products the Scope allowed. A change?

Yes. Taking away a choice adds a (11.2(16)). The effect may still be nil. If Merrow Vale would have picked the same product, cost and time do not move (61.2).

ECC 11.2(16), 61.2

More of the same work turned up. A change?

Only where the Scope limits the amount, by a stated quantity or by the extent its drawings show. Going beyond either is a change (60.1(1)). More than Merrow Vale measured for the same drawn work is not. Its cost is shared through the . Extra from the ground is tested under 60.1(12).

ECC 60.1(1), 60.1(12)

Dana omits work to give it to another firm. Can she?

Taking work out changes the Scope, so it is a compensation event, and a saving can cut the Prices (63.4). No NEC case settles whether she may omit work only to give it to . Ask for her reason in writing and take advice.

ECC 60.1(1), 63.4

Source: ECC 11.2(16), 60.1(1), 60.1(12), 61.2, 63.4. ECC Option C 54.1.

Go deeper (optional)

Notify it yourself

Letter 02 in the Toolkit. Send it on its own, through the portal (13.7).

What to writeNotification of a compensation event

To: [Project Manager]

We notify a under 60.1(1).

Your [date] instruction requires [what it asks for].

Before, [Scope clause] said [what it said].

Reply within one week (61.4).

Source: ECC 13.2, 13.7, 60.1(1), 61.3, 61.4.