What does NEC4 clause 60.1(1) mean?
An instruction from the Project Manager changing the Scope is a compensation event, unless the instruction was made to accept a Defect or the Contractor asked for or caused the change.
Updated: 15 September 2026. By Jack Butler-Kettle, Quantity Surveyor & Claims Consultant.
The answer
Clause 60.1(1) is the NEC4 equivalent of a variation. The event is an instruction that changes the Scope, and it has two exceptions: an instruction made to accept a Defect, and a change to the Scope that the Contractor asked for or caused. To bring an event within the paragraph the Contractor has to show three things: an instruction was given, it came from the Project Manager, and it altered the Scope as it stood, meaning the description of the works and the constraints on how they are provided, including any Scope the Contractor supplied for its own design. A drawing revision issued without an instruction, or a change the Contractor proposed to make its own design work, does not qualify. Because the event arises from the Project Manager's own instruction, the Project Manager notifies the compensation event at the time of the instruction and instructs a quotation; if it does not, the Contractor notifies under clause 61.3, and the eight week bar does not apply because the Project Manager should have notified it. The change to the Prices is assessed under clause 63.1 as the effect of the instruction on the actual Defined Cost of work done by the date of the instruction, the forecast Defined Cost of the work not yet done, and the resulting Fee, so an omission reduces the Prices and an addition increases them, and both carry the cost and time risk allowances clause 63 requires. What most often goes wrong is that the change is priced from the activity schedule or the Bill of Quantities instead of from Defined Cost or that the Project Manager argues the change was Contractor-caused when the Scope itself was ambiguous. Any delay to the Completion Date is assessed separately under clause 63 by the programming expert.
Example
The situation
A mechanical services contractor on an Option C contract receives a Project Manager's instruction changing the ductwork in one plant room from galvanised steel to stainless steel after the galvanised sections have been ordered but before they are installed.
What happens
- The instruction is a change to the Scope, it is not made to accept a Defect and the Contractor did not ask for it, so the Project Manager notifies the compensation event with the instruction.
- The quotation assesses under clause 63.1 the additional material and the cancellation charge on the galvanised order at £14,600.
- The additional fabrication and installation labour is assessed at £3,900, a change in forecast Defined Cost of £18,500 in all.
- With a fee percentage of 12 per cent the Fee is £2,220 and the proposed change to the Prices is £20,720.
- The quotation states the risk allowance included for lead time on the stainless sections and shows any effect on the Accepted Programme separately.
The quotation in figures
| Item | Amount |
|---|---|
| Additional material and cancellation charge | £14,600 |
| Additional fabrication and installation labour | £3,900 |
| Change in forecast Defined Cost | £18,500 |
| Fee at 12 per cent | £2,220 |
| Proposed change to the Prices | £20,720 |
The outcome
The proposed change to the Prices is £20,720, with the programme effect shown separately from the money.
