Case 02
Prolongation Cost Caused by a Compensation Event
- Prolongation
- Programme
- Defined Cost
The commercial question
“A CE delays planned Completion. Which time-related costs are genuinely incremental?”
Illustrative scenarios
These are independently created fictional scenarios for professional learning. Figures and conclusions are illustrative, not project-specific assessments or standard rates.
Project scenario
NEC4 ECC Option A
Assume the Compensation Event has already been established.
The programme assessment identifies a 21-day CE-caused delay to planned Completion.
The direct changed-Scope cost is assessed separately.
| Item | Before the CE | After implementation |
|---|---|---|
| Planned Completion | 28 August | 18 September |
| Completion Date | 11 September | 2 October |
| Terminal float | 14 days | 14 days |
Contractor position
The Contractor submits prolongation / time-related cost of:
£57,900
- Project Manager
- Site Manager
- Quantity Surveyor
- Site Engineer
- Security
- Welfare
- Temporary power / water
- Site cabins
- General plant
- Head-office overhead
- Weekly preliminaries allowance
What would you challenge first?
A three-week delay does not automatically equal three weeks of tender preliminaries.
Existing project resources are not automatically additional CE cost.
Some resources may genuinely remain longer because of the CE.
A blanket preliminaries allowance may overlap with separately claimed resources.
Key commercial principle
Key commercial principle
“Prolongation is an effect, not a weekly rate.”
“Programme establishes the time effect. The applicable cost mechanism establishes how the monetary effect is assessed.”
Commercial Desk headline diagnosis
Commercial Desk headline diagnosis
Further commercial review required.
The CE may create additional time-related Defined Cost, but the quotation needs to distinguish resources genuinely affected by the three-week extension from costs that would have been incurred anyway.
One Compensation Event may create multiple effects — direct changed work, labour and resource effects, plant, disruption, resequencing, temporary works, programme delay and prolongation. Those effects are not automatically separate Compensation Events.
How the conceptual comparison works
Without CE
Raw resource / cost position → Applicable SCC / SSCC rules → Without-CE Defined Cost
With CE
Raw resource / cost position → Applicable SCC / SSCC rules → With-CE Defined Cost
Identify the CE-caused Defined Cost effect, then apply the applicable Fee treatment.
See the Worked Commercial Solution
Full Worked Solution
Part of the upcoming NEC4 Compensation Events Pack.
The Pack includes:
- Cases 01–06 full Worked Solutions
- Main Option A–F impact analysis (not six recalculated versions of each Case)
- Advanced Option B/D Quantity-change Module where applicable
- Structured evidence and commercial assessment guidance
- Example response wording
Planned launch price: £79 one-off. No subscription. Coming soon.
Based on the standard NEC4 ECC framework. Always check the applicable Contract Data, secondary Options, Y clauses, Z clauses, local amendments and governing law before applying the worked examples to a live contract.
Related Commercial Desk tools
Programme Assessment
Review the programme basis before using a time period commercially.
Commercial Desk is an independent practical reference for construction professionals. It is not affiliated with or endorsed by NEC. It does not reproduce the NEC4 contract and is not a substitute for the applicable executed contract or professional or legal advice. Always check the relevant contract, Contract Data and amendments.