There is a persistent misunderstanding in the NEC community that has quietly cost Contractors money, diluted legitimate entitlement, and handed Employers an analytical advantage they were never supposed to have.

It concerns the dividing date and specifically, whether the programme is progressed to it before a Compensation Event is assessed.

NEC4 ECC Practice Note 1 (October 2017, updated January 2019) was clear: the objective is to "assess the effect due only to the compensation event and not due to other events." Events between the last Accepted Programme and the dividing date must be accounted for. That should have settled the debate. 

It didn't.

And on most projects, it is the Contractor who pays the price.

 

What the dividing date actually protects

A Compensation Event assessment is not a reconciliation between two submitted programmes. It is an isolated, surgical measurement of a single event's impact on your planned Completion. To make that measurement accurately, you need a programme that reflects reality up to the point the event occurred, not your scheduled position from weeks or months earlier.

Without progressing to the dividing date, two things happen, and both tend to hurt the Contractor.

First, delays the Employer caused or contributed to get absorbed into a broader comparison, making it harder to identify and quantify their true effect. Second, any slippage the Contractor introduced independently, regardless of cause, can be conflated with the Employer's event, weakening the compensation claim or providing grounds to reduce it.

The dividing date prevents that conflation. It draws a clear line: this is where we were, this is what the event did, and this is the effect. Without that line, the assessment becomes a negotiation rather than an analysis, and in that environment, the party with more leverage tends to win.

There is also the question of events that started life as early warnings before being confirmed as prevention events. Where delay has already worked its way into an accepted programme, that needs to be accounted for - otherwise the assessment either double-counts the impact or understates the remaining exposure. Either error can be exploited.

 

Why the misapplication keeps happening - and who it favours

The most common incorrect approach is to measure the difference between the last Accepted Programme before the event and the next one submitted after it. This is simpler, faster, and superficially logical. It is also wrong, and it almost always disadvantages the Contractor.

Here is why.

By the time a compensation event is assessed, the programme submitted after the event has been shaped by everything that happened in the intervening period: your own productivity, resource constraints, weather, concurrent events, and the Employer's event itself, all blended together and impossible to cleanly separate. Attributing that blended picture to a single event is not analysis. It is approximation. And when that approximation is challenged, the Contractor rarely has the forensic record to defend a position that was never properly established in the first place.

Several factors push projects toward this flawed approach.

Some project managers, particularly those trained on traditional contracts, simply default to version comparison because that is what they know. NEC's requirement for a live, prospective, regularly accepted programme is a genuine departure from older frameworks, and the methodology for assessing change does not always follow.

Some planners lack the capability to produce a proper dividing date assessment. Progressing the programme to a specific date, isolating the compensation event's effect from background change, and communicating that clearly under scrutiny, while fairly simple, requires schedule analysis expertise. Where that expertise is absent, the simpler approach tends to fill the gap.

Commercial pressure is also a factor. Teams agree to approximate assessments to keep relationships intact, avoid disputes, or close out events quickly. In the short term this can feel pragmatic. Over the course of a project with multiple Compensation Events, it tends to produce exactly the ambiguity it was meant to avoid, locking the Contractor into a precedent that becomes harder to unpick as the project progresses and the stakes rise.

 

The programme is your evidence base - treat it that way

There is a practical dimension to all of this that contractors often underestimate. The requirement to progress the programme to the dividing date creates a direct incentive to keep programmes regularly updated and accepted. The more current your Accepted Programme, the less bespoke analytical work is needed each time a Compensation Event is assessed. Neglect the programme, and the administrative burden of producing a proper assessment becomes so significant that the pressure to cut corners becomes almost irresistible.

In projects with multiple overlapping events, regular updates also provide the underlying data needed for any serious discussion of concurrency or apportionment. Without that chronological record, the contractor is left arguing a position it cannot fully evidence which is not a position you want to be in when the project is under pressure and the Employer's team is looking for reasons to reduce the award.

 

The commercial bottom line

The dividing date is not a procedural nicety. It is one of the primary mechanisms through which a Contractor protects the integrity of its entitlement under NEC.

Getting it right means investing in planners who understand forensic schedule analysis, maintaining programmes that are current and accepted, and resisting the pressure to settle Compensation Events on the basis of comparison rather than isolation. It means treating the programme not as a reporting obligation but as a commercial document - because under NEC, that is exactly what it is.

The contractors who do this consistently tend to have cleaner change records, stronger positions in dispute, and significantly fewer situations where legitimate entitlement has quietly evaporated between one Accepted Programme and the next.

 

 

Best, Radek Makar Director | ViViAD radek@viviad.co.uk

ViViAD is an independent consultancy specialising in Planning, Project Controls, Power BI Reporting, and Construction Claims Support. We work across the UK - typically on NEC contracts in defence, nuclear, renewables, and infrastructure - embedding with project teams to bring structure, clarity, and commercial control. Interim or longer-term, we fit around what you need.