What does NEC4 clause 60.1(20) mean?
The Project Manager notifying the Contractor that a quotation for a proposed instruction is not accepted is a compensation event.
Updated: 15 September 2026. By Jack Butler-Kettle, Quantity Surveyor & Claims Consultant.
The answer
Clause 60.1(20) pays for a quotation that led nowhere. Under clause 65 the Project Manager may instruct a quotation for a proposed instruction, the Contractor submits it within three weeks, and the Project Manager replies within three weeks by instructing the change, notifying that it will not be instructed, or notifying that the quotation is not accepted. Clause 60.1(20) makes the third of those replies a compensation event. The Contractor shows the clause 65 instruction to quote, its quotation, and the notification of non acceptance. Because the event arises from the Project Manager's own notification, the Project Manager notifies the compensation event with it; if that is missed, the Contractor notifies under clause 61.3 and the eight week bar does not apply because the Project Manager should have notified. The change to the Prices is assessed under clause 63.1 as the effect on actual Defined Cost by the date of the notification and forecast Defined Cost afterwards, plus the Fee, and what that captures depends on the main Option. Under Options A and B, Defined Cost is defined in clause 11.2(23) as the cost of the components in the Short Schedule of Cost Components excluding the cost of preparing quotations for compensation events, so the cost of pricing the proposed instruction is outside it and what remains is other Defined Cost the exercise caused, such as surveys the Project Manager asked for alongside it; under Options C, D, E and F, Defined Cost under clause 11.2(24) carries no such exclusion, so the people cost of preparing the quotation is within it. What most often goes wrong is that the Contractor treats the notification that the change will not be instructed as if it were this event, or claims the whole value of the abandoned instruction rather than the cost of responding to it. Any delay to the Completion Date is assessed separately under clause 63 by the programming expert.
Example
The situation
A lift installer on an Option C contract is instructed under clause 65 to submit a quotation for a proposed instruction adding a goods lift to a second core. The installer's engineers spend 62 hours on the shaft survey, drive selection and pricing, and a supplier is paid £640 for a site survey.
What happens
- The installer submits the quotation within the three weeks.
- The Project Manager replies within three weeks that the quotation is not accepted and notifies the compensation event with that reply.
- The quotation for the event assesses under clause 63.1 the 62 hours at the Defined Cost rate for those people, £58 per hour, which is £3,596, plus the supplier's survey at £640.
- The change in Defined Cost is £4,236, with the Fee added at the fee percentage in the Contract Data.
The event under Option C and Option A
| Item | Option C | Option A |
|---|---|---|
| Engineering time, 62 hours at £58 per hour | £3,596 | Excluded |
| Supplier's site survey | £640 | £640 |
| Change in Defined Cost | £4,236 | £640 |
The outcome
Under Option A the same event would carry only the £640 survey, because clause 11.2(23) excludes quotation preparation from Defined Cost.
