NEC has no extension of time clause. Time and money move together through compensation events, assessed prospectively against the accepted programme, with a notification period that has teeth. Carrying traditional habits into that mechanism is the commonest cause of lost entitlement, and recognising it is the first step in extension of time claim preparation on an NEC project.
The commercial questions are the same. The procedure, the timing and the consequences of getting the procedure wrong are different in every respect that matters.
One mechanism for both
A compensation event changes the Prices and the Completion Date together, assessed in one exercise.
That removes a common traditional failure, where an extension was obtained and the associated cost was never claimed.
It also means a quotation has to address both, and one that deals only with cost leaves the time effect unrecovered.
Assessment is prospective
The effect is assessed on forecast at the time of assessment rather than on what eventually happened.
Once assessed, the assessment stands even where the outcome differs, which transfers the forecasting risk to whoever prepared it.
Which is why the work belongs in the quotation rather than in a retrospective claim, and why retrospective claims under NEC go so badly.
The notification period
The contract requires notification within a stated period of becoming aware, and the consequence of missing it is express rather than arguable.
That makes it a commercial risk to be managed rather than a point to be debated later.
It is the single most common way NEC entitlement is lost, and it is entirely avoidable with a diary and a short standard form.
The accepted programme
Assessment of the time effect works from the accepted programme, which makes acceptance a live commercial issue rather than an administrative one.
Without an accepted programme the position deteriorates for both parties, because there is no agreed reference point for any assessment.
Chasing acceptance is unglamorous and it is worth more than almost anything else a commercial team can do on an NEC project.
Early warning
The early warning mechanism is separate from notification and exists so that matters are raised before they bite.
Failure to give early warning can affect how a compensation event is assessed, which gives it teeth beyond good practice.
Used properly it is the most valuable part of the contract and it is usually the least used, because it requires raising problems early rather than defending them late.
Quotations and the periods
The contractor quotes, the project manager replies, and there are periods for each step with consequences for missing them.
A quotation sets out the change to the Prices and to the Completion Date, with the assumptions stated.
Stating the assumptions is what allows the position to be revisited if they prove wrong, which is the protection most quotations leave out.
Where the project manager assesses
If no quotation is provided, or none is accepted, the project manager makes the assessment and it stands.
That assessment reflects the information the project manager holds rather than the contractor’s own position.
So failing to quote is not neutral: it hands the calculation to the other side on their own records.
Terminal float and time risk allowance
NEC deals with float and risk allowance explicitly in the programme requirements, which is more than most traditional forms do.
That makes the programme a more informative document and also a more contentious one, since what it shows has consequences.
Understanding how the form treats each is worth doing before the first programme is submitted rather than after the first dispute.
Where entitlement has already gone
Where notification periods have passed, the position needs reading against what the contract actually says rather than treating it as settled.
There may be other routes, and there may not, and that is a question for review and sometimes for advice.
What is certain is that the next event does not have to go the same way, because the periods run from each event individually.
Common traditional habits that fail here
Waiting for the final account, by which time every period has long closed.
Claiming actual cost after the event where the contract required a forecast before it.
And presenting a prolongation and disruption structure to a project manager assessing Defined Cost, which does not answer the question being asked.
What good practice looks like
Notify promptly, quote promptly, state assumptions, keep the programme accepted and current.
Keep cost records in the form the contract defines rather than in the company’s own format, because that is what assessment works from.
None of that is claims work. It is administration, and on NEC projects it is what makes claims unnecessary.
What clients should expect
That the mechanism rewards promptness and punishes delay, on both sides.
That a well run NEC project generates very few disputes, and a badly run one generates them faster than a traditional form would.
And that the remedy for a badly administered NEC project is better administration from today rather than a submission about the past.
Where it fits
Which mechanism applies is established first, because the two require entirely different work.
Where periods have been missed, the position needs initial dispute review before anything is drafted.
Running the mechanism properly during the works is cost control and variations work, and on NEC it matters more than on any other form.
The form rewards a commercial team that keeps up with it and is unforgiving of one that does not, which is a management question rather than a drafting one.
That is the single most useful thing to understand before taking on an NEC project rather than after.
Running late with nobody agreeing why?
Extension of time claim preparation sets out the events relied on, their effect on the programme and the contractual route to relief, in a form that can be assessed rather than argued over.