How does NEC4 clause 63 work?

Clause 63 sets the rules every quotation and every Project Manager's assessment must follow, and clause 63.1 is the core of it. The change to the Prices is assessed as the effect of the compensation event upon the actual Defined Cost of the work done by the dividing date, the forecast Defined Cost of the work not yet done by the dividing date, and the resulting Fee. The dividing date is the date of the communication that gave rise to the event where it arises from an instruction or a changed decision, and otherwise the date of the notification. Everything before that date is assessed from records; everything after it is a forecast, and the split is what makes the assessment a forecast rather than a claim. Clause 63 also requires the assessment to include cost and time risk allowances for matters which have a significant chance of occurring and are at the Contractor's risk under the contract, and it assesses the event on the footing that the Contractor reacted competently and promptly. For Options A and B the Project Manager and the Contractor may agree to use rates and lump sums instead of Defined Cost and Fee, but that is by agreement, not by default. Delay to the Completion Date is assessed separately under clause 63 from the effect on planned Completion shown on the Accepted Programme; that is programme work and sits with the programming expert. What goes wrong: quotations priced from bill rates or from invoices with no reference to the Schedule of Cost Components; no split at the dividing date, so actual cost and forecast are muddled; the Fee left off or applied to the wrong base; and no risk allowance, so the forecast is optimistic and, once the event is implemented under clause 66, it cannot be corrected when the risk happens.