ABSTRACT
Compensation events are much more than about change though; they also reflect the risk profile of the contract. The Contractor may be compensated for a number of events, those events not being for reasons which are at the Contractor's own risk. When considering the principle of compensation events under the Term Service Contract, it is appropriate first to consider how change is managed with most other standard forms of contract. The New Engineering Contract contracts take a very different approach to pricing and managing change as contained within the compensation event provisions, whereby the event is notified, priced, assessed and implemented within a defined and relatively short timescale. The Service Manager instructs the Contractor to search for a Defect and no Defect is found unless the search is needed only because the Contractor gave insufficient notice of doing work obstructing a required test or inspection.
