Prolongation Cost in NEC Contracts — your deep-dive (NEC3 vs NEC4) 🏗️⏱️
Below is a practical, clause-by-clause tour of how prolongation (time-related cost of delay) is treated under the NEC Engineering and Construction Contract—comparing 📘 NEC3 and 📖 NEC4. I’ll keep it conversational, pull in the exact mechanics (with citations), and add real-world “what ifs.”
1️⃣ Purpose (what “prolongation” really means in NEC)
In NEC, there isn’t a free-standing “prolongation claim.” Time-related costs flow from a compensation event (CE) that both (a) delays planned Completion and (b) increases Defined Cost. The contract then adjusts Prices and time.
- NEC’s engine is the CE system: the Contractor (and PM) notify CEs under Clause 61, the Contractor prices and programs the change under Clause 62, and the PM (or Contractor) assesses under Clause 63. The price effect is the effect on Defined Cost + Fee (NEC3 63.1; NEC4 63.1).
- Delay is measured against the Accepted Programme: a CE delays Completion by the length that planned Completion moves out on the accepted programme (NEC3 63.3; NEC4 63.5).
- Importantly, the only rights for a CE are changes to Prices, Completion Date, and Key Dates (NEC3 63.4; NEC4 63.6). This shuts the door on separate common-law “loss & expense” heads outside the CE mechanism.
Historical context (NEC3 ➡️ NEC4)
- NEC4 clarifies time-bar wording in 61.3 (the 8 weeks rule) and tightens the PM’s reply steps in 61.4/61.5/61.6/61.7, making the CE workflow more explicit (e.g., deemed acceptance if the PM stays silent).
- NEC4 also modernises early warning into a structured Early Warning Register under Clause 15 (NEC3’s “Risk Register” under Clause 16), a big driver of mitigation and therefore of reducing prolongation exposure.
Why the shift? To make notices, assumptions, and programme-based delay assessment crisper—so parties price time impacts contemporaneously and avoid back-loaded “global claims.”
2️⃣ Breakdown — the moving parts you’ll actually use
A. What triggers “prolongation” costs? (Compensation events)
Typical CE triggers include PM changes to Scope and certain access issues, etc. (NEC3 60.1(1)-(3) excerpted; NEC4 parallels).
Prevention-type events under Clause 19 can also be treated via instruction and assessed as CEs.
B. Notify—fast! (the 8 weeks time bar)
- The Contractor must notify within 8 weeks of becoming aware or loses entitlement—unless the PM/Supervisor should have notified (NEC3 61.3; NEC4 61.3). This is huge for prolongation.
- PM’s reply step is formalised (NEC4 61.4–61.7) and silence can become acceptance after reminders (NEC3 61.3 last paragraph; NEC4 61.2/61.4 with deemed outcomes).
C. Quote it with time + cost (Clause 62)
The quotation must show:
- Price change + delay to Completion/Key Dates, with alterations to the Accepted Programme where affected (NEC3 62.2; NEC4 62.2).
- Deadlines: Contractor submits within 3 weeks, PM replies in 2 weeks, with rules for revised quotes and deemed acceptance if silence persists (NEC3 62.3–62.6; NEC4 62.3–62.6).
D. Assessing the prolongation (Clause 63)
- Cost basis: the effect on (i) actual Defined Cost to the dividing date + (ii) forecast Defined Cost after it + (iii) Fee (NEC3 63.1; NEC4 63.1).
- Dividing date: PM’s instruction (NEC3: “when instructed or should have been instructed”); NEC4 phrases it succinctly (“the dividing date”).
- Delay measurement: shift in planned Completion on the Accepted Programme (NEC3 63.3; NEC4 63.5).
- Early warning effect: if the Contractor failed to give an early warning it could have given, the assessment treats it as if one had been given—dampening recovery (NEC3 63.5; NEC4 63.7/63.9 pair with similar ethos).
E. What costs are actually recoverable?
Defined Cost is driven by the Schedule of Cost Components (SCC) or Shorter SCC (SSCC):
- Options A/B: Defined Cost = SSCC items (NEC3 Option A 11.2(22); Option B 11.2(22)), priced via Activity Schedule or BoQ for payment, but CEs still price via Defined Cost + Fee.
- Options C/D/E: SCC governs; SSCC may be used by agreement for C/D/E CE assessment (NEC3 SSCC front note).
- The SSCC/SCC spell out people, equipment, plant/materials, charges, manufacture, design etc. as allowable components—i.e., the buckets into which prolongation costs must fit (NEC3 & NEC4 schedules).
- Disallowed Cost (NEC3 11.2(25)) bites if, for example, cost was incurred only because you failed to give an early warning—a classic reason to prune claimed prolongation (also mis-paid Subcontractor costs, unjustified costs, etc.).
3️⃣ Key interpretations & implications (the “so what?”)
- Prolongation is not “head-office on top”: recovery is defined-cost-based, not a global “loss & expense” add-on. If it’s not in SCC/SSCC (or is “disallowed”), it’s not recoverable.
- The programme rules everything: you show actual delay movement on the Accepted Programme; if no accepted programme, the PM uses their own for assessment (NEC3 64.2). That’s leverage to keep the programme current.
- Notices are existential: miss 8 weeks and you’re out (subject to the PM/Supervisor-caused exception). This is where many prolongation claims fail. (NEC3 61.3; NEC4 61.3).
- Early warning culture = more recovery: fail to early-warn and assessments assume you did; you lose fat in the forecast. (NEC3 63.5; NEC4 63.7–63.9).
- Only CE rights: no separate claim track—63.4/63.6 nails it—so keep everything inside the CE machine.
4️⃣ Cross-references that often drive prolongation
- Access to site (Clause 33.1): Client/Employer must provide access by the Access Dates—classic prolongation trigger when late.
- Programme duties (31/32): the programme content and revisions (showing CE effects) are mandatory and directly feed delay assessment. (NEC3 31.2, 32.1).
- Prevention (19.1): PM instructs how to deal with a force-majeure-style event; assessment then runs as a CE.
- Early warning (NEC3 16 / NEC4 15): register/meetings aim to avoid or reduce effects—your best friend for protecting time-related recovery.
- Delay damages (Option X7): if Completion is pushed and X7 is active, you need the CE to push the Completion Date too—otherwise delay damages bite. (NEC4’s option schedule shows X7 availability; NEC3 likewise).
5️⃣ “What-if” scenarios (relatable field examples)
🧱 What if the Client gives late access?
- You notify a CE under 60.1(2)/(3) and 33.1 access obligations; submit a 62.2 quotation with programme alterations and time impact; assessment under 63.1/63.5 moves planned Completion; prices adjust by Defined Cost + Fee.
📝 What if design info is revised by the PM?
- PM’s instruction changing Scope is a CE; you price time and cost per 62/63. If the PM issues assumptions because the effect is uncertain, later correction triggers re-assessment (NEC3 61.6; NEC4 61.6).
🌧️ What if extreme weather stops the works?
- If it qualifies as Prevention (19.1) or is listed as a CE by your Option Zs, PM instructs and you proceed with CE assessment (time + Defined Cost).
🛠️ What if you miss the 8-week notice?
- Unless it’s a PM/Supervisor instruction/certificate/decision event (NEC4), no change to Prices or dates (NEC3 & NEC4 61.3). Moral: diary and notice discipline are non-negotiable.
6️⃣ Suggestions for clarity & improvement (practical drafting tips) 💡
- Spell out people rates and equipment basis early
Load the Contract Data with realistic People Rates and a sensible published equipment list. This makes CE pricing of time-related prelims predictable (SSCC items). (NEC4 Contract Data notes, “Data for Shorter SCC (A/B)” & “Data for SCC (C/D/E)”). - Define site overheads explicitly
Use SSCC/SCC “charges/overheads” lines to anchor what counts as Working Areas overheads (utilities, site services, etc.)—so everyone knows where time-related prelims sit. (NEC3 SSCC Charges 4.1–4.3). - Programme hygiene
Make programme acceptance a living habit: NEC requires CE quotations to include programme alterations (62.2). Encourage monthly accepted revisions to keep 63.3/63.5 delay assessments objective. - Early warning culture
Build a positive loop around Clause 16 (NEC3) / 15 (NEC4). Failure to early-warn can shrink recovery (NEC3 63.5; NEC4 63.7–63.9). - Z-Clauses to remove ambiguity
- Clarify float ownership and treatment of time risk allowances to avoid fights during CE delay analysis.
- Reinforce that head-office overhead is only recoverable where the SCC/SSCC captures it (otherwise, it’s outside Defined Cost). (See SSCC structure + Disallowed Cost).
- Tie to X7 explicitly
In Contract Data, connect Sectional Completion / delay damages (X7) milestones to programme logic so that valid CE slippage automatically protects against damages. (Options list confirms X7 presence).
7️⃣ Final takeaways (fast-scan) ✅
- Think “CE,” not “prolongation claim.” Time-related cost recovery = CE machinery (61–63).
- Notice within 8 weeks or lose it (with narrow exceptions).
- Prove delay on the Accepted Programme; keep it updated; include alterations in your quotes (62.2, 63.3/63.5).
- Price by Defined Cost + Fee using SCC/SSCC buckets—not generic “loss & expense.”
- Early warning protects recovery—miss it and your assessment gets trimmed.
- Only CE rights exist—no parallel claims track (63.4/63.6).
Interpretative nudge 🤔
Can it be interpreted that NEC disallows “head-office prolongation” unless it’s evidenced within SCC/SSCC? Yes—because NEC pays Defined Cost per the schedules and trims anything “disallowed,” including costs incurred only due to missing early warnings.
1
Early Warning — Risk of delay/cost
Clause 15 (Early Warning)
Clause 16 (Risk Register / Early Warning)
Dear [Project Manager’s Name],
Under Clause 15Clause 16, we give an Early Warning of a matter which could increase the Prices, delay Completion, delay a Key Date, and/or impair performance:
- Event: [e.g., late information for Area B, drawing package MEP-B02 outstanding]
- Consequence if unmitigated: [e.g., tower crane idle, labour standby, resequencing of Level 6 works]
- Time risk allowance held: [x days]
- Proposed mitigation: [e.g., partial instruction for grids A–D; interim design freeze; access swap with Area C]
- Information/decision needed: [what is needed and by when]
Please add this to the Early Warning RegisterRisk Register and arrange a risk-reduction meeting at the earliest.
Kind regards,
[Contractor Representative]
[Title] | [Company] | [Contact]
Attachments: marked-up look-ahead, interface map, risk notes, photos.
2
Notification of CE — Late Access
Clauses 60.1(2)/(3), 33.1, 61.3
Dear [Project Manager’s Name],
We notify a Compensation Event under Clause 60.1(2)/(3) due to late access to [location] beyond the Access Date required by Clause 33.1. We became aware on [date]; this notification is within 8 weeks as required by Clause 61.3.
Facts
- Access planned: [date/time] (per Accepted Programme Rev [no.])
- Access granted: [date/time]
- Impacted activities: [IDs / descriptions]
- Immediate effects: [e.g., site prelims extended, equipment standing time]
Please confirm the event and instruct us to submit a quotation under Clause 62.
Kind regards,
[Name], [Role]
Attachments: programme extract (before/after access), site diary, photos, delivery logs.
3
Notification of CE — PM instruction to stop/not start
Clause 60.1(4), 61.3
Dear [Project Manager’s Name],
On [date/time], you instructed us to [stop / not start] work in [area] (Instruction Ref [xx]). This is a Compensation Event under Clause 60.1(4). We notify under Clause 61.3 within 8 weeks.
Immediate effects
- Activities affected: [list]
- Resources on standby: [people/equipment]
- Proposed safe hold state: [describe]
Please confirm and instruct a Clause 62 quotation (time + cost).
Kind regards,
[Name], [Role]
Attachments: instruction copy, programme fragnet, resource list, site photos.
4
Notification of CE — Adverse Physical Conditions
Clauses 60.2–60.3, 61.3
Clause 60.1(12), 61.3
Dear [Project Manager’s Name],
We encountered physical conditions at [location] on [date] which differ materially from those an experienced contractor would have allowed for, considering the Site Information and other listed information. This is a Compensation Event under Clauses 60.2–60.3Clause 60.1(12). We notify within 8 weeks per Clause 61.3.
Observed condition: [description]
Why unforeseeable: [brief test against contract assumptions]
Immediate measures: [safety/protection/isolations]
Early impact: [time/cost headlines]
Please confirm and instruct a quotation under Clause 62.
Kind regards,
[Name], [Role]
Attachments: survey logs, photos, ground reports, method statements, marked drawings.
5
Request for PM to notify CE (PM-caused)
Clause 61.1, 61.3
Dear [Project Manager’s Name],
Per Clause 61.1, where an event arises from your instruction, change to the Scope, or other PM/Client action, you notify the Compensation Event. The [instruction/change/decision] issued on [date] changes the Prices and delays the Completion Date/Key Date(s).
Please issue the Clause 61.1 notification or confirm that we should proceed with our own Clause 61.3 notice and quotation under Clause 62.
Kind regards,
[Name], [Role]
Attachments: instruction/change record; before/after programme fragment.
6
Submission of CE Quotation (time + cost)
Clauses 62.2–62.6, 63.1, 63.563.3
Dear [Project Manager’s Name],
Further to your instruction to quote for CE #[Ref], we submit our quotation under Clause 62, including:
- Change to the Prices = effect on Defined Cost + Fee (Clause 63.1)
- Delay to Completion/Key Dates measured against the Accepted Programme (Clause 63.5Clause 63.3)
- Programme alterations showing logic, float, and pacing (Clause 62.2)
Please reply within 2 weeks per Clause 62.3 or advise assumptions under Clause 61.6 if uncertainty remains.
Kind regards,
[Name], [Role]
Attachments: priced build-ups (SCC/SSCC), resource histograms, updated programme (XER/PDF), method notes, risk register excerpt.
7
Request for PM Assumptions (uncertain effect)
Clause 61.6, 62.2, 63.1
Dear [Project Manager’s Name],
The effect of CE #[Ref] cannot be assessed reliably because [uncertainty reason]. Under Clause 61.6, please state assumptions for us to base the quotation on (e.g., [scope boundary, access sequencing, utility isolation duration]).
We will submit our Clause 62 quotation on those assumptions. If any assumption is later found to be wrong, Clause 61.7 applies and the CE will be re-assessed.If any assumption proves wrong, we will notify and proceed via a further CE for correction in accordance with the contract process.
Kind regards,
[Name], [Role]
Attachments: uncertainty log, alternative scenarios, programme options.
8
Reminder — PM reply overdue (quotation)
Clauses 62.3–62.6 (+ 61.4 deemed acceptance)
Dear [Project Manager’s Name],
We submitted our quotation for CE #[Ref] on [date]. The reply under Clause 62.3 (accept / instruct revise / notify assessment) is now overdue by [x] days.
Kindly respond within [2 working days].
If no reply is received after our reminder, Clause 62.6 and 61.4 apply and the quotation may be treated as accepted.
Please reply in accordance with Clause 62.
Kind regards,
[Name], [Role]
Attachments: original submission, reminder trail, programme excerpt.
9
Programme revision for acceptance (CE effects)
31.2, 32.1–32.2, 63.563.3
Dear [Project Manager’s Name],
We submit Programme Rev [no.] for acceptance in accordance with Clauses 31–32. This revision incorporates:
- Logic and timings for CE #[Ref] per Clause 62.2
- Movement of planned Completion and Key Dates measured per Clause 63.5Clause 63.3
- Updated resource histograms and time risk allowances
Please review and accept, or advise reasons for non-acceptance as per Clause 31.3.
Kind regards,
[Name], [Role]
Attachments: XER/native file, PDF print, narrative of changes, risk register extract.
10
PM assumptions found wrong — Re-assessment
61.6 → 61.7
Dear [Project Manager’s Name],
Your Clause 61.6 assumptions dated [date] for CE #[Ref] have proved incorrect (details below). Under Clause 61.7, the compensation event shall be re-assessed.Accordingly, we request correction via a further CE to adjust time and Defined Cost.
- Assumption: [state]
- Actual outcome: [state with evidence]
- Consequence: [additional Defined Cost; programme movement]
Please instruct re-assessment and confirm any further quotation you require.
Kind regards,
[Name], [Role]
Attachments: records showing variance, updated programme, cost build-ups.
11
Adjustment to Completion Date (X7 alignment)
63.563.3 + Option X7
Dear [Project Manager’s Name],
The Accepted Programme (Rev [no.]) shows planned Completion moving by [x days] due to CE #[Ref], assessed under Clause 63.5Clause 63.3. Please confirm the corresponding change to the Completion Date so that any X7 delay damages align with the adjusted date(s).
Kind regards,
[Name], [Role]
Attachments: programme comparison (Rev N vs N-1), CE decision, P6/XER, narrative.
12
Payment application note — CE time/cost this period
Core payment clauses (+ Y options if applicable)
Dear [Project Manager’s Name],
Our Application #[no.] includes Defined Cost relating to agreed/assessed CEs #[list] arising from [late access / PM stop / adverse conditions], together with Fee. The work done and standing time for this period are summarised in the attached schedules and align with the latest Accepted Programme.
Please certify in accordance with the payment provisions.
Kind regards,
[Name], [Role]
Attachments: CE schedule with values, SSCC/SCC build-ups, timesheets, plant logs.
13
Optional: Notice of Dispute (CE issue)
W1 / W2 / W3 (per Contract Data)
Dear [Project Manager’s Name],
Despite our attempts to resolve CE #[Ref], a disagreement remains on [issue]. We propose a senior-level meeting under W1/W2 to resolve. Failing this, we reserve our right to refer the matter to adjudication under W1/W2 (or W3 if applicable).
We remain open to resolution and will continue to progress the works.
Kind regards,
[Name], [Role]
Disclaimer: These templates provide editorial guidance and are not legal advice. Check your Contract Data, Option clauses (A–E, X-options), and Z-clauses.