Case 02

Prolongation Cost Caused by a Compensation Event

  • Prolongation
  • Programme
  • Defined Cost
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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.

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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.

Illustrative programme position
ItemBefore the CEAfter implementation
Planned Completion28 August18 September
Completion Date11 September2 October
Terminal float14 days14 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.

Quotation Review

Check whether a CE quotation looks commercially complete.

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.