Compensation Event Flow Chart
61.1 - Project
Manager or
Supervisor issues an
instruction or changes
a decision
61.3 - Contractor notifies a
compensation event under clause
60.1 of an event that has happened
or he expects to happen.
61.2 - Project
Manager issues a
proposed
instruction or
changed decision
Conditions for
notifying
1) He believes it is a
compensation event
If the Contractor does not notify a compensation
event within eight weeks of becoming aware of
the event, he is not entitled to a change in the
Prices, the Completion Date or a Key Date
unless the Project Manager should have notified
2) The Project
Manager has not
notified the event to
the Contractor
the event to the Contractor but did not.
Project Manager
issues a
compensation
event notice with
the instruction
61.1 - Unless the event
arises from fault of the
Contactor in which case
the Prices and
Completion Date are not
changed
61.4 Project
Manager decides
whether it is a compensation event
or not.
Contractor instructed to submit a
quotation (61.6 - If the PM decides
that the effects of a CE are too
uncertain he states assumptions in
his instruction)
Yes
No
61.4 Project Manager notifies
his decision within the period for reply.
A failure by the Project Manager to reply within
two weeks of this notification is treated as
acceptance by the Project Manager that the
event is a compensation event and an
instruction to submit quotations
64.1
·
·
·
·
The Project Manager
compensation event
assess
a
if the Contractor has not submitted a
required quotation and details of his
assessment within the time allowed,
if the Project Manager decides that
the Contractor has not assessed the
compensation event correctly in a
quotation and he does not instruct the
Contractor to submit a revised
quotation,
if, when the Contractor submits
quotations for a compensation event,
he has not submitted a programme
which this contract requires him to
submit or
Three weeks
62.3 The
Contractor
submits Quotation
if, when the Contractor submits
quotations for a compensation event
the Project Manager has not accepted
the Contractor’s latest programme for
one of the reasons stated in this
contract.
Two Weeks
62.3 The PM
Responds
Instruction to
submit a revised
quotation – only
after explaining
reasons
61.5 - PM notifies
if he thinks the
Contractor did not
give an early
warning he could
have done.
Notification that
the proposed
instruction or a
proposed changed
decision will not
be given
62.1 - The Project Manager may instruct the
Contractor to submit alternative quotations based
upon different ways of dealing with the
compensation event which are practicable. The
Contractor submits the required quotations to the
Project Manager and may submit quotations for
other methods of dealing with the compensation
event which he considers practicable.
62.5 The Project Manager extends the time allowed
for
·
the Contractor to submit quotations for a
compensation event and
·
the Project Manager to reply to a quotation
if the Project Manager and the Contractor agree to
the extension before the submission or reply is due.
The Project Manager notifies the extension that has
been agreed to the Contractor.
62.6 Automatic acceptance of a quotation – be
careful.
Acceptance of a
quotation
Notification that
the PM will be
making his own
assessment
Contractor puts the
instruction or changed
decision into effect.