For years, NEC contracts asked parties to assess compensation events against the last Accepted Programme, without ever explaining what to do when that programme was months out of date. The answer arrived in stages. Understanding those stages, and the position we have now landed on, matters to anyone assessing or defending a compensation event today.

The problem NEC3 left open

NEC3 required a compensation event to be assessed by reference to the Accepted Programme. Simple enough, until the Accepted Programme is three or four months old, progress has moved on, and other compensation events have occurred in the meantime.

• Do you impact the stale programme as it stands?
• Do you first status it for progress only , updating percentages complete and reducing remaining durations, but ignore everything else that has happened since acceptance?
• Or do you bring it fully up to date, reflecting both progress and the impacts of intervening compensation events, as well as everything else known at the point the notification was issue, and only then assess the new event?

The three approaches produce materially different answers.

A programme frozen at an old data date may show float that has since been consumed, activities that have since slipped or accelerated, and a critical path that no longer reflects reality. The halfway house - progress statused, but interim events ignored, is scarcely better. It measures the new event against a network that pretends the disruptions, delays or mitigation measures, and intervening compensation events never happened, attributing their effects either to nobody or, worse, to the wrong event. Impact the same fragnet into each version and you will get three different movements of planned Completion and three different assessments of entitlement.

NEC3 did not resolve this. Parties argued all three positions, usually according to which produced the better commercial outcome.

For anyone who understands scheduling mechanics, this was never a genuinely open question.

A CPM network calculates forward from a data date. Impact a fragnet into a programme whose data date is months in the past and you are measuring the effect of an event against a state of the works that no longer exists, float that has been consumed, activities that have progressed or slipped, a critical path that has moved. Any competent scheduler could have told you from day one that anything other than what eventually became the 2019 position would produce nonsensical results. The contract took fourteen years to catch up with basic scheduling mechanics.

 

NEC4's first attempt made it worse

The original 2017 drafting of NEC4 Clause 63.5 provided that, when assessing delay, only those operations which the Contractor had not completed and which were affected by the compensation event would be changed. This was introduced by a clarification that "a delay to the Completion Date is assessed as the length of time that, due to the compensation event, planned Completion is later than planned Completion as shown on the Accepted Programme current at the dividing date". The intent behind this wording was sound enough - to split the works into two parts - work already done, which is fixed fact, and work yet to be done, which remains forecast, with the compensation event assessed only against the latter.

What the wording did not do was explain how to arrive at the correct status of the programme at the dividing date. If the last Accepted Programme was months old, which operations counted as "completed"? Completed according to the stale programme, or completed in fact? And what state was the remaining work in - the state the old programme predicted, or the state it had actually reached after progress and intervening events? The 2017 drafting drew the line between done and not-done without telling anyone how to establish where that line truly fell. For a contract whose stated purpose was greater clarity, it introduced its own subjectivity.

What NEC4 did usefully introduce was a name for that split point: the dividing date. It is not a defined term, it is not capitalised and carries no entry in Clause 11, but it is a functional concept doing real work within Clause 63.5. For an instructed change, the dividing date is the date of the instruction. For other events, it is the date of notification. Everything before the dividing date is treated as fact, everything after is forecast. That concept has become central to compensation event assessment, and to how we approach the analysis forensically.

 

The Practice Note and the 2019 amendment

In October 2017, ECC Practice Note 1 set out the drafters' intent: before assessing a new compensation event, the last Accepted Programme should first be brought up to date. That means statusing it with actual progress to the dividing date and reflecting the effects of compensation events that have already occurred since acceptance. Only once the true position of planned Completion at the dividing date is established should the new event be impacted.

A practice note, however, is guidance, not contract. Parties resisting an assessment were quick to point this out. The clarification only carried full weight when the January 2019 amendment to NEC4 wrote the principle into Clause 63.5 itself: the assessment takes into account events which have happened between the date of the Accepted Programme and the dividing date.

"Events" here is broad. It captures progress, other compensation events, and material changes in logic. The same principle applies to the assessment of impacts on Key Dates and Sectional Completion Dates, not just planned Completion.

 

What this means in practice

Three points follow for anyone administering or analysing an NEC contract.

First, the assessment is a two-step exercise - and the test for the updating step is truth, not mechanics.

Step one: bring the Accepted Programme to a state that is true as at the dividing date. That means statusing actual progress - percentages complete, actualised dates, remaining durations. But it does not stop there. If the sequence of the works genuinely changed in the interim, the logic changes. If durations were wrong or have been superseded by events, they are corrected. If compensation events occurred in the interim period, their impacts are modelled. The updated programme must reflect where the Contractor actually stood at the dividing date, not a fiction in which the original logic survived untouched while the works moved on around it. The discipline is not "preserve the logic"; it is that every change must reflect what actually happened, evidenced by contemporaneous records, not what now suits the assessment.

Step two: impact the new compensation event into that true position and measure any further movement of planned Completion. Skipping step one is an error; corrupting it with unevidenced changes dressed up as updates is a subtler one, and both will fail under scrutiny in adjudication.

Second, the assessment remains programme-based, not calendar-based. Entitlement under Clause 63 turns on the movement of planned Completion within the network - float position, logic, and the critical path at the dividing date. A day of delay to a non-critical activity is not a day of entitlement. We see this misunderstood constantly, usually in day-for-day claims that never engage with the programme at all.

Third, the currency of the Accepted Programme is a commercial risk issue. The 2019 wording is fair to both parties, but it works best when the gap between the Accepted Programme and the dividing date is short. Every month a programme submission sits unaccepted, or unsubmitted, the updating exercise becomes larger, more contestable, and more expensive to resolve. A regularly maintained Accepted Programme is not administrative housekeeping but the evidential foundation on which every compensation event assessment stands, and the single cheapest form of dispute avoidance available under an NEC contract.

 

The forensic angle

When these assessments end up in dispute, the quality of the updating exercise is usually where the argument lives. Does the updated programme reflect the true position at the dividing date - actual progress, actual sequence, corrected durations - or a constructed one? Were intervening compensation events modelled as discrete, evidenced impacts, or folded silently into revised durations? Can every departure from the Accepted Programme be traced to contemporaneous records? A Project Manager's earlier acceptance of a programme establishes procedural compliance with Clause 31 but it does not validate the logic, the critical path, or the cause-and-effect chain for the purposes of a contested assessment. Those must stand on their own merits. Two wrongs don't make a right but in many scenarios it is much better to have a correct but not accepted Cl32 programme in place, than submit an incorrect programme accepted by the Project Manager.

That is where forensic delay analysis earns its keep: reconstructing the true position at the dividing date from contemporaneous records, and demonstrating - transparently and reproducibly - what the new event actually did to planned Completion.

 

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.