How to Clarify Effectively: Instructions and Proposed Instructions under NEC4 ECC

Managing instructions under the NEC4 Engineering and Construction Contract (ECC) is a bit like navigating a complex junction. The road might seem clear, but if you don’t signal properly, misunderstand a sign, or head down the wrong lane, things can go wrong fast – and you may find yourself heading for a dispute instead of a smooth delivery.

In our recent Knowledge Hub webinar, NEC drafter and co-author of NEC3/4 Practical Solutions, Dr Stuart Kings, guided project teams through one of the most frequently misunderstood processes in NEC4 – how to issue instructions effectively, and when to make use of the proposed instruction clause. Drawing on real project experience and common pitfalls, Dr Kings highlighted the importance of clarity, correct sequencing and maintaining a reliable audit trail to manage contracts and keep projects running on track.

Why clarity matters – and why it’s often missing

Unclear or incorrectly issued instructions can have serious knock-on effects. What might start as a simple scope change can quickly snowball into delays, claims, or misaligned expectations – all because the proper steps weren’t followed. These aren’t usually deliberate oversights; more often, they’re the result of good intentions executed in the wrong way.

For straight forward work, the NEC4 ECC gives Project Managers the authority to issue instructions under clause 14.3, allowing them to change the Scope of the works. However, where that change affects time or cost, it must also be notified as a compensation event under clause 61.1. This is then followed by a quotation request using clause 61.2. Missing any of these steps – or doing them out of order – risks confusion and non-compliance. One common mistake Dr Kings highlighted is when a compensation event is notified before the actual instruction has been issued, or when no instruction is given at all. In both cases, the communication lacks contractual standing. Both steps must be followed.

Under the contractor’s obligation, 27.3 states the contractor must obey an Instruction in accordance with the contract and is given by the project manager. However, if the scope includes an illegal or impossible requirement, the project manager or contractor must notify the other as soon as possible, enabling a further instruction to appropriately change the scope.

It’s also crucial to understand that not every change in scope qualifies as a compensation event. For example, rescheduling a meeting may technically be a change, but unless it has a measurable impact on time and cost – such as risk allowances highlighted in clause 63.8 – it doesn’t warrant a compensation event. Distinguishing between administrative adjustments and material scope changes helps avoid overloading the contract management process with unnecessary notifications.

The importance of written and trackable communication

Clause 13.1 sets out the requirement for all communications to be in a form that can be read, copied and recorded – which means verbal updates or informal chats don’t meet the bar. Clause 13.2 goes further, stating that teams must use the communication system outlined in the Scope. So, if Sypro is named, sending an email or Teams message alone won’t count as valid communication under the contract.

This is where digital contract management systems add real value. Platforms like ours provide time-stamped, structured communication threads and allow instructions to be clearly documented and linked to related events. That means there’s never any ambiguity about what was instructed, when, or by whom. And if a dispute arises, there’s a reliable audit trail to fall back on.

When to propose before you instruct

For more complex or high-risk changes, NEC4 provides another useful mechanism: the proposed instruction. Clause 65.1 allows Project Managers to request a quotation for a potential change before deciding whether to issue the instruction. It’s a ‘look before you leap’ approach – giving both parties a chance to assess the implications before committing to the work.

Dr Kings noted that clarity is key here too. Communications must state explicitly that they are proposed instructions, andinclude a decision date. If no formal instruction follows, the quotation is deemed not accepted, as per clause 65.2. That said, clause 13.5 allows both parties to agree an extension, provided it’s confirmed before the original deadline expires.

Where proposed instructions require specialist input – for example, engineering advice or feasibility studies – contractors may be entitled to recover their costs in preparing the quotation. Clause 65.3 covers this, and in some cases, it may be appropriate to request a quotation just for the cost of preparing the full quotation. If no instruction follows and no agreement can be reached, clause 61.3 offers another route for contractors to recover their costs.

Managing uncertainty with sound assumptions

Compensation events don’t always come with clear, predictable outcomes. In cases with more complex work, clause 61.6 allows the Project Manager to include assumptions when requesting a quotation – helping both sides to price the change based on a shared understanding. If those assumptions turn out to be wrong, the Project Manager must issue a correction. Contractors, however, have no ability to make assumptions.

Dr Kings recommends that these assumptions focus on the most likely or best-case scenario. Overly cautious or worst-case assumptions tend to inflate quotes and slow things down – often unnecessarily. A balanced approach, built on open communication and fair assumptions, helps ensure quotations are realistic and that risk is managed proportionately.

Keeping on top of compensation events

The compensation event process follows four distinct stages: notification, quotation, assessment and implementation. Under standard NEC4 timescales, Project Managers have one week to respond to a notified compensation event, contractors have three weeks to submit their quotation, and Project Managers then have two weeks to respond.

If the contractor misses the quotation deadline, the Project Manager is required to make their own assessment. If the Project Manager fails to respond within the agreed timeframe – and no extension has been granted – the quotation is automatically deemed accepted (if the reminder has been served by the contractor). These timelines are there to keep things moving and avoid disputes caused by inaction or ambiguity.

Bringing it all together with Sypro

Clear, compliant instruction processes rely on structured communication, accurate records and shared understanding – all of which can be supported by the right digital tools. Sypro’s NEC management platform gives Project Managers the ability to issue both instructions and proposed instructions with full traceability, linked documentation and automated deadline tracking.

It also provides a secure, transparent history of all project communications, helping teams stay aligned, accountable and ready to respond to change – whether routine or unexpected. With tools like these in place, following NEC4 instruction processes becomes not just easier, but more effective.

Watch the full session

For a deeper dive into the topic, including worked examples and advice from real projects, watch the full webinar with Dr Stuart Kings. It’s an essential resource for anyone managing instructions under NEC4 and looking to avoid the most common (and costly) mistakes.