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How does NEC4 clause 64 work?

The Project Manager may assess a compensation event itself on four grounds only, must notify it with details within the period the Contractor had to quote, and if it fails to after the Contractor notifies the failure the Contractor's quotation is treated as accepted.

Updated: 15 September 2026. By Jack Butler-Kettle, Quantity Surveyor & Claims Consultant.

The answer

Clause 64 lets the Project Manager take the assessment out of the Contractor's hands, but only on stated grounds and only to a timetable. Under clause 64.1 the Project Manager assesses a compensation event if the Contractor has not submitted the quotation and details within the time allowed, if the Project Manager decides the Contractor has not assessed the event correctly and does not instruct a revised quotation, if the Contractor has not submitted a programme or alterations to a programme which the contract requires, or if the Project Manager has not accepted the Contractor's latest programme for one of the reasons the contract states. The assessment uses the same rules as any quotation, so it is Defined Cost plus Fee under clause 63 with the actual and forecast split at the dividing date, and where there is no accepted programme to work from the Project Manager uses its own assessment of the programme. Under clause 64.3 the Project Manager notifies the Contractor of the assessment and gives details of it within the period the Contractor had for submitting its quotation, counted from when the need for the assessment became apparent. Clause 64.4 is the sanction: if the Project Manager does not assess within that period and the Contractor notifies the failure, and a further two weeks pass without an assessment, the Contractor's quotation is treated as accepted. Once notified, the assessment is implemented under clause 66 and the route to change it is dispute resolution, not a revised quotation. Three things go wrong. Project Managers use their own assessment as a negotiating position, notifying a bare figure with no details. Contractors treat it as an opening offer and keep resubmitting quotations that no longer have any status. And where the ground was that no quotation was submitted, there is nothing for clause 64.4 to deem accepted, so the Contractor's only protection is to have quoted in time.

Example

The situation

The Contractor submits a quotation of £50,000 for an instructed change, and the Project Manager decides it is incorrectly assessed because the labour is priced at bill rates rather than from the Schedule of Cost Components.

What happens

  1. Rather than instruct a revised quotation, the Project Manager notifies that it will make its own assessment.
  2. Within the period the Contractor had for its quotation, the Project Manager notifies an assessment of £38,000, showing the people cost rebuilt from the records and the Fee at the Contract Data fee percentage.
  3. The Project Manager's assessment of £38,000 is implemented in place of the quotation.
  4. If instead the Project Manager notifies that it will assess and then does nothing, the Contractor notifies the failure.
  5. Two weeks after that, with still no assessment, the £50,000 quotation is treated as accepted.

The outcome

Either the Project Manager's £38,000 assessment stands, made within the Contractor's quotation period, or its failure to assess leaves the Contractor's £50,000 quotation treated as accepted.

Our NEC compensation event review tests a Project Manager's assessment against the clause 63 rules and the records it should have used.