The purpose of this article is to explore the Compensation Events (CE) module, including the navigation of the register, the creation and implementation of CEs and the elevation of events to become a CE.
Video content is available below.
The below article is based upon the NEC3 ECC, PSC and TSC contract types and the terminology reflects this.
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All CEs within a contract are stored within this register.
All communicated events are visible to both the Employer and the Contractor with the most recently communicated event appearing at the top of the register.
The different states of CEs within the register are listed below;
- DRAFT: CE which is currently in a draft state, meaning it has not yet been communicated (these display in the register above all communicated events and will only be visible to the Party that created them).
- VOID: CE which has been marked as void (these will appear at the bottom of the register, below all communicated events). Events can only be voided whilst in draft state.
- Struck through: A communicated CE which appears grey and struck through means it has been marked as CE notified incorrectly.
- Black CE: CE which is outstanding (awaiting action from the opposing Party or yourself).
- Blue CE: indicates that this CE has been implemented.
Additionally, if the figure in the price column appears amber, this indicates an estimated price for the CE, provided by the Employer and thus is only ever visible to the Employer’s Party.
A totals bar is located at the bottom of the register which displays cumulative amounts for the different quote stages. The total in amber is the estimated cumulative amount which is only visible to the Employer’s Party:
CE’s can be created by either the Employer (PMI = Project Manager’s Instruction) or the Contractor (CE-CNTFD = Contractor Notified Compensation Event).
Creating a CE as the Employer;
Navigate to the left-hand expandable menu and select Create New followed by PMI/Compensation Event:
This will open the draft edit form where you can add details, a title, and select a CE type and category (if applicable).
There is also a section to estimate the change that the CE may have on the Contract Price and the Completion Date. These estimations are only visible to the Employer’s Party.
If the Employer wishes the Contractor to add a quotation for this compensation event, then there is a tick box for this, located underneath the title field. If this box is ticked, and the event is communicated, then the event will appear in the Contractor’s reminders page prompting them to submit a quotation against the CE:
Navigate to the left-hand expandable menu and select Create New followed by Compensation Event.
This will open a new window in which you can add a title, CE type and details, a title, and select a CE type and category (if applicable):
Once communicated, this event will then appear in the Employer’s reminders for them to decide whether the CE was notified correctly. If so, then the CE will follow the same process as an Employer notified CE.
Please note, it is not possible to submit a quotation within the CE until a decision has been given by the Project Manager:
Once a CE has been progressed and a quotation has been instructed, it will appear on the reminders page for the Contractor to add a quote.
Start by opening the CE by selecting it from the register.
Navigate to the Quotations/PMA tab and select Add new quotation:
Please note, that to be able to progress the event, a value must be provided for both the proposed change to the total of the Prices and the effect this CE will have on the Completion Date (these values can be entered as 0 if necessary).
It is also possible to detail any changes to Key or Sectional Completion dates in the contract, although this is not mandatory:
Once sent, this quote will then appear within the quotations tab. Multiple quotations can be added by the Contractor if necessary.
The Employer also has the option to assess the CE themselves. Please see below on how this can be done.
Within the Quotations/PMA tab, select Notify intent to assess this CE.
If this option is selected, it will supersede any quotations submitted by the Contractor.
The only option then is for the Employer is to submit their project manager's assessment (PMA):
When the Employer selects Add new project manager's assessment it will open a new window in which a value must be provided for both the proposed change to the total of the Prices and the effect this CE will have on the Completion Date (these values can be entered as 0 if necessary).
It is also possible to detail any changes to the key dates or sectional dates in the contract, although this is not mandatory:
Once the Employer has either submitted their assessment or has accepted a quote from the Contractor, this CE will become implemented and will be highlighted blue in the register.
The following events have the ability to be elevated to a CE;
This option is available within the event itself. Please see the example below for an EW.
This process is the same for PICD's and TQ's.
Once an EW has been submitted, an option will appear to Create Draft CE:
Selecting this will create a new CE and pull the title, details and any associations through. CEMAR automatically associates the new event with the existing one and so in this case, the CE and EW will be associated - this can be viewed in the Associations tab of the event.
It is then possible to create and progress the CE.
Within TSC and PSC (option G) contracts, a CE can be created within a Task Order (TO).
When creating a TO, you will notice a Compensation Events tab at the top. This will be greyed out whilst in draft state:
Once the TO has been instructed, the CE tab will become available.
This tab acts in a similar manner to the CE register. Using the same colour code and cumulative totals bar at the bottom of the window.
To create a CE within this TO, select Create New CE:
(An alternative route is to select Create New from the left-hand expandable menu and then EI/Compensation Event. A new window will appear prompting you to indicate whether this CE will be for the main contract or for a specific TO):
A new window will open, and this process then mimics the creation of a new CE as per usual. The sole difference is that you will be required to input the effect on Task Order Dates (not Completion Date).
Any TO compensation events requiring action will appear within the reminders page with CE’s for the main contract.
It is also possible to navigate to a list of TO compensation events within the CE register: