What does NEC4 clause 60.1(9) mean?
It is a compensation event when the Project Manager withholds an acceptance for a reason that is not one the contract states.
Updated: 15 September 2026. By Jack Butler-Kettle, Quantity Surveyor & Claims Consultant.
The answer
Clause 60.1(9) limits the Project Manager's reasons for saying no. The event is that the Project Manager withholds an acceptance for a reason not stated in the contract. Wherever the contract requires the Contractor to submit something for acceptance, such as a design, a Subcontractor, a programme or proposed subcontract conditions, the clause concerned lists the reasons for which the Project Manager may not accept it, and the contract also allows the Project Manager to withhold acceptance for other reasons; the effect of clause 60.1(9) is that withholding for one of those other reasons is a compensation event. To rely on the paragraph the Contractor shows the submission, the reply withholding acceptance, the reason the reply gives, and that the reason is not one the relevant clause states. Where the reply gives no reason the position is weaker, because the Contractor must then show what the real reason was; a request for the reason in writing is the first step. The Contractor notifies the event under clause 61.3 within eight weeks of becoming aware of the withheld acceptance. 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, in practice the difference between what the refused proposal would have cost and what the Contractor had to do instead; the Contractor is expected to have mitigated by resubmitting or proposing an alternative promptly. What most often goes wrong is that the refusal is dressed up in a stated reason the facts do not support and the Contractor accepts it without challenge, or that a programme is not accepted for a stated reason and the Contractor tries to use this paragraph when the real complaint lies elsewhere. Any delay to the Completion Date is assessed separately under clause 63 by the programming expert.
Example
The situation
A demolition contractor submits the name of a proposed Subcontractor for the asbestos removal package, with the information the contract requires, and the Project Manager withholds acceptance on the ground that the Client has worked with a different licensed firm before and prefers it.
What happens
- That is not a reason the contract states, so the demolition contractor asks for the reason in writing and obtains it.
- The contractor notifies a compensation event under clause 61.3 while engaging the Client's preferred firm to keep the work moving.
- The quotation assesses under clause 63.1 the difference between the refused Subcontractor's quoted price and the price of the firm the Contractor had to use, £22,500 of additional forecast Defined Cost.
- With a fee percentage of 13 per cent, a Fee of £2,925 is added, a proposed change to the Prices of £25,425.
- The quotation attaches both subcontract quotations and the Project Manager's written reason.
The quotation in figures
| Item | Amount |
|---|---|
| Difference between the two subcontract quotations, additional forecast Defined Cost | £22,500 |
| Fee at 13 per cent | £2,925 |
| Proposed change to the Prices | £25,425 |
The outcome
The compensation event is quoted at £25,425 with the written reason and both quotations behind it.
