NEC compensation events


Overview
The purpose of this standard is to provide learners with an opportunity to increase their understanding of compensation events, the compensation event procedures and rules for assessment of compensation events, under NEC Engineering and Construction Contracts.

Duration

Minimum 1 day of 6 learning hours

Purpose/scope

The purpose of this standard is to provide learners with an opportunity to increase their understanding of compensation events, the compensation event procedures and rules for assessment of compensation events, under NEC Engineering and Construction Contracts.

The scope of this standard covers:

  • the law concerning condition precedent clauses
  • The importance of early warning notices
  • types of compensation event
  • notification of compensation event procedures
  • submission of quotations and revisions procedures
  • basis and rules for assessment of compensation events
  • dealing with multiple and/or complex compensation events
  • dealing with disagreement and/or lack of action by the project manager on compensation event notifications and/or quotations
  • challenging assessments
  • key differences in compensation event procedure and assessment of compensation events, between the different versions of NEC Engineering and Construction Contracts

Occupational relevance

Training delivered against this standard would be relevant to the following occupational group(s):

  • developers, contract administrators, sub-contractors
  • commercial managers, quantity surveyors, management and leadership

Candidate pre-requisites

There are no candidate pre-requisites as part of this standard. However a basic knowledge of NEC Engineering and Construction Contract terminology and procedures would be beneficial and it is advised that the NEC contract introduction course is taken in advance.

Instruction/supervision

As a minimum, course instructors must be able to demonstrate that, in relation to this standard, they have:

  • a train the trainer or instructional techniques course certificate
  • successfully completed training to this standard 
  • at least 2 years relevant industrial experience
  • a verifiable CV.

Delivery

Delivery may be in an on or off the job environment.

All materials and equipment must be of a suitable quality and quantity for candidates to achieve learning outcomes, and must comply with relevant legislation.

The class size and candidate/instructor ratio must allow training to be delivered in a safe manner and enable candidates to achieve the learning outcomes.

The following delivery methods may be used in the delivery of this standard:

  • classroom
  • a blend of classroom and e-learning

This standard is considered to contain 51% or more theoretical learning.

This standard is considered to be set at an intermediate level.

Assessment

For the successful completion of training, candidates must complete an end of course practical assessment or knowledge test that measures the learning outcomes and has a pass or fail criteria.

Quality assurance

Quality assurance against this standard will require initial approval of the training organisation and their content mapped to the standard. 

CITB will also conduct an approval intervention, either desk-based or centre visit, to ensure the training organisation can meet the requirements of the training standard. 

Approved training organisations (ATOs) will be required to present information on records of training and assessment upon request to CITB for desk-based analysis. They will also be visited annually by the CITB quality assurance team.

Renewal/refresher

There are no mandatory renewal or recommended refreshment requirements for this standard.

Approval date

To be confirmed

Review cycle

Either on request or in 5 years from approval date.

Learning outcomes

The candidate will be able to: 
Additional guidance to support learning outcome
describe what a condition precedent clause is
  • ‘condition precedent’ clauses effectively mean ‘if you do not comply – you do not get’
describe the basis of a minimum of five common compensation events
  • clause 60 and the bespoke ‘Z’ clauses incorporated into the contract
explain the obligations to notify early warning notices and compensation events and the consequences of failing to notify these
  • clause 61
explain procedures regarding the project manager’s response to the issue of early warning notices and notification of compensation events
  • clauses 16 and 61
explain procedures to submit quotations and revisions for compensation events and their content
  • clause 62
describe the basis for assessment of compensation events
  • clause 63
explain the project manager’s assumptions and qualifications made in assessment of compensation events
  • clause 64
describe how to implement  assessments of compensation events
  • clause 65
  • programme changes
give examples and explain ways of dealing with multiple and/or complex compensation events
  • in particular regarding programmes
describe how you would deal with disagreement and/or lack of action by the project manager on compensation event notifications and/or quotations  
explain procedures to challenge assessments on compensation events
  • ultimately adjudication or dispute board
describe the key differences in compensation event procedures and assessment between the different types and versions of NEC Engineering and Construction Contracts
  • between primary and short contracts and between NEC versions (3 and 4)
  • terminology changes
  • the pricing of compensation events in NEC3 uses percentages for working area, or preliminary overheads, and another for people overheads, plus fee.
  • in NEC4 just one fee percentage on costs. The costs for working area and people overheads need to be proven