--- title: NEC4 Term Service Contract (TSC)  High Level User Guide date: 2026-06-11T11:33:54Z modified: 2026-06-11T11:35:59Z permalink: "https://gmhplanning.co.uk/nec-downloads/nec4-term-service-contract-tsc-high-level-user-guide/" type: downloads status: publish excerpt: The NEC4 Term Service Contract (TSC)  High Level User Guide is intended to be a quick reference guide as to where a particular subject matter can be found within the contract, focused on the most commonly used and relevant day to day clauses. wpid: 8651 featured_image: "https://gmhplanning.co.uk/wp-content/uploads/2017/11/NEC4-Term-Service-Contract.png" featured_image_alt: NEC4 Term Service Contract author: Glenn Hide timestamp: 2026-06-11T11:35:59Z tags: [] --- ## Introduction This overview is intended to be a quick reference guide as to where a particular subject matter can be found within the contract. This guide focuses on the most commonly used and relevant day to day clauses likely to be most relevant. For a specific project, any bespoke clause amendments introduced by a Client would have to be taken into account. Sections 1-9 are the core clauses for every TSC option A-E contract, with option specific clause details. ## Section 1 – General ### Actions 10.1Reminder that all Parties are to act as stated in the contract 10.2Obligation to also act in a spirit of mutual trust and cooperation. 11.2List of defined terms (in alphabetical order). ### Communications 13.1All communications in a form that can be read, copied and recorded. 13.2Communications are only valid if submitted by the system stated in Scope. 13.3Responses within period for reply or as stated in contract. 13.5Service Manger may extend period for reply by agreement. 13.7Any notification has to be separate from any other communication. ### Service Manger (SM) 14.1Service Manger acceptance does not transfer liability from Contactor. 14.2Service Manger must formally delegate actions in writing. 14.3Service Manger can issue instructions to change the Scope. 14.5Service Manager gives an instruction to correct Price List. ### Early Warnings 15.1Reasons for which an early warning should be notified. 15.2Either party can instruct the other to an early warning meeting. 15.3Actions expected of all parties at an early warning meeting. 15.4Updating of the Early Warning Register by the Service Manger. ### Contractor’s Proposals 16.1Contractor can propose value engineering to reduce Prices. 16.2Service Manager responds to value engineering proposal within 4 weeks. 16.3Contractor may propose a change to Working Areas. ### Ambiguities 17.1Notifying and resolving of an ambiguity between contract documents. 17.2Notifying and resolving of an illegal or impossible requirement. ### Task Orders 19.1details of Task Order issued by Service Manager for Contractor to quote 19.2Contractor submits (within 3 weeks) and SM responds (2 weeks) to quote 19.3Service Manager may instruct revised Task Order quote 19.4Extension to produce quote may be granted by Service Manager 19.5Service Manager may assess and notify pricing for a Task if not agreed. 19.6Task prices may be assessed from Price List or as a compensation event. 19.7Delay damages may be applicable if Task Completion Date exceeded. 19.8Task price list added to Price List and work added to Scope once issued. ## Section 2 – Contractors Responsibilities ### Providing the Works 20.1Contractor obligation to Provide the Works in accordance with Scope. 20.2Contractor minimises interference caused to Affected property. ### Design of Equipment 20.1Contractor to submit details of design of Equipment if instructed by SM. ### People 21.1Contractor to provide key person(s) stated in CD2 or suitable replacement. 21.2Service Manger can instruct Contractor to remove any person. ### Working with Client and Others 23.1Requirement for Contractor to work with Others as instructed/in Scope. 23.2Contractor and Client provides services and other things stated in Scope. ### Subcontracting 24.2Requirement to submit proposed Subcontractor for acceptance by SM. 24.2Reasons under which SM could not accept a Subcontractor. 24.3Also have to submit subcontractor terms for acceptance by SM. ### Other responsibilities 25.3Contractor obeys instructions given in accordance with contract by SM. 25.4Contractor acts in accordance with Health & Safety as stated in Scope. ### Disclosure 27.2Contractor may only publicise works with Client’s agreement. ## Section 3 – Programme ### Starting Date / Completion Date 30.1Contractor does not start work on site until the starting date. 30.2Contractor does not start work on a Task until Task Order issued by SM. 30.3Service Period may be extended to include completion of a Task. ### The Contractor’s Plan 31.1Requirement for Contractor to submit first plan for acceptance. 31.2Detailed list of what is required to be shown on plan for acceptance. 31.3Reasons for SM not to accept a plan and potential for deemed acceptance. ### Revising the Contractor’s Plan 32.1List of what should be shown on a revised plan 32.2Intervals for revised plan submissions to Service Manager. ### Task Order Programme 33.1Task Order programme submitted within period stated in Contract Data 33.2Detailed list as to what is required to be shown on Task Order programme. 33.3Reasons for SM not to accept programme/potential for deemed acceptance. ### Revising Task Order Programme 34.1Requirements to show on each revised Task Order programme. 34.2Revised Task Order programme as instructed or when Contractor chooses access. ### Access 35.1Client provides access to Affected Property as shown on plan/programme. ### Instruction to Stop or Not Start Work 36.1SM may instruct to stop or not start work and to restart/remove from Scope. ## Section 4 – Quality Management ### Quality Management System 40.1Contractor operates a quality management system in line with Scope. 40.2Quality policy statement and plan issued for Service Manager acceptance. 40.3Service Manager may instruct correct failure to comply with quality plan. ### Tests and Inspections 41.1Requirement to carry out tests and inspections as per Scope/applicable law. 41.3Requirement to notify Service Manager prior to tests being carried out. 41.5Requirement for Service Manager to carry out tests/inspections 42.1Requirement to carry out tests prior to delivery where required. ### Notifying/Correcting Defects 43.1Either party notify each other as soon as become aware of a defect. 43.2Contractor obligation to correct defect whether notified or not. 43.3Contractor corrects defect within time that minimises impact. 43.4Service Manager/Client arranges access to correct a defect if needed. ### Accepting Defects 44.1Can propose for defect to not be corrected and Scope changed accordingly. 45.2Contractor to submit resultant quotation saving to SM to accept/not accept. ## Section 5 – Payment ### Assessing the amount due 50.1Service Manager to assess the amount due at each assessment date. 50.2Requirement to submit application before each application date. 50.3Defines the amount due in any application. 50.4If Contractor not submit application on time SM will assess at zero. 50.525% PWDD can be withheld if no 1st accepted plan. 50.6SM corrects any incorrectly paid amounts in next assessment. ### Payment 51.1Service Manger to certify payment within 1week of assessment date. 51.2Confirmation of period within which payment should be made. 51.3Interest recoverable on items corrected on a later certificate. 51.4interest recoverable on late payments. ### Defined Cost 52.1Any Contractors costs not identified in Defined Cost are in the Fee. ### Final Assessment 53Section on how/when final assessment is made at end. ## Section 6 – Compensation Events ### Compensation Events (CE) 60.1List of what events would be valid compensation events (18 reasons). ### Notification 61.1SM can notify compensation event at time of issuing instruction. 61.2SM instructs Contractor to produce quotation (and proceed in meantime). 61.3Contractor can notify a CE and can be time barred after a period if late. 61.4SM to accept or not accept if Contractor has notified a CE. 61.4Deemed acceptance if the SM does not respond to reminder. 61.5SM can advise that an early warning could have been given which wasn’t. 61.6SM can state assumptions for Contractor to base the quote upon. 61.7No compensation events can be issued eight weeks after Service Period. ### Quotations 62.1SM can request alternative quotations for dealing with a CE. 62.2Contractor to provide a quote and alterations to programme (if relevant). 62.3Contractor to provide quote within 3 weeks, SM response within 2 weeks. 62.4Service Manger can instruct a revised quote (after explaining why). 62.5Service Manger can extend period for Contractor to produce quote. 62.6Contractor’s quote deemed accepted if no response to reminder. ### Assessment 63.1Price List rates used if CE only affects quantities in Price List. 63.2Basis of quotes in relation to if should be actual or forecast defined cost. 63.3May be agreed to use rates or lump sums to assess change to Prices. 63.4Prices are not reduced unless otherwise stated in contract. 63.5States the only CE reasons which would reduce the Prices. 63.6Definition of reasons for contractual movement in Task Completion Date. 63.8SM may assess as though early warning had been given if it wasn’t. 63.9Rules for allocation of risk within a compensation event quotation. 63.10Requires Contractor to act promptly and competently to a CE. 63.11Ambiguities assessed in favour of Party that did not provide the Scope. ### Service Manger’s Assessments 64.1Reasons under which SM can make own assessment of a CE. 64.2SM may assess plan for remaining work in assessing a CE. 64.3SM to notify Contractor of their own assessment of a CE. 64.4Deemed acceptance if SM no response to a notification of no assessment. ### Proposed Instructions 65.1Service Manager can instruct a quotation for proposed instruction. 65.2Contractor submits quotation within 3 weeks and SM to respond. 65.3If quotation not accepted SM can still instruct (and then assessed as CE). ### Implementation 66.1Implemented when CE accepted/assessed/deemed accepted. 66.2Prices/Completion Date changed accordingly following agreement. 66.3Compensation event quote is not changed if later found to be wrong. ## Section 7 – Use of Equipment, Plant and Materials 70.1Title of materials transfers from Contractor to Client once in Service Area 71.1Contractor has right to use Client equipment, Plant and Materials 71.2Contractor returns Client equipment, Plant/Materials end of Service period 72.1Contractor has right to use material provided by Client to Provide Service ## Section 8 – Risks and Insurance 80.1List of Client’s liabilities. 81.1List of Contractor’s liabilities 83Insurance cover details 84Insurance policies and who needs to provide what to whom. ## Section 9 – Termination 90.2Termination table showing party/reason/procedure/amount due 91.1List of valid reasons for termination 92Procedures to follow upon termination 93Payment upon termination ## Additional Option A clauses 11.2Option A specific identified and defined terms. 31.4Requirement for activity schedule to relate to items on plan/ programme. 55.1Clarifies that information in Price List is not Scope. 55.3Contractor may submit revised Price List for acceptance. 55.3Reasons SM has for not accepting a revised Price List 60.2Reasons when change to Price List may reduce Prices 63.12Adjustment of Prices in line with value engineering percentage 63.15Ascertaining a new People Rate where required. ## Additional Option C clauses 11.2Option C specific identified and defined terms. 20.4Contractor provides forecast of total Defined Cost at contract intervals. 24.4Contractor to submit pricing information for each subcontractor. 41.7Liability of costs for carrying out repeat test or inspection. 50.7Payments in other currencies. 50.9Opportunity for finalising Defined Costs for part of the works. 52.3Requirement for Contractor to keep records. 54.1/2SM assesses Contractor’s share of the Prices and actual defined cost. 54.3assessment of Contractor’s share following Completion. 55.1Clarifies that information in Price List is not Scope 60.2Reasons when change to Price List may reduce Prices 63.13Prices are not reduced if it was a Contractor idea to reduce defined cost 93.3/4Rules on assessing share in event of termination of the contract. ## Additional Option E clauses 11.2Option E specific identified and defined terms 20.4Contractor provides forecast of total Defined cost at contract intervals. 24.4Contractor to submit pricing information for each subcontractor. 50.8Payments in other currencies. 50.9Opportunity for finalising Defined Costs for part of the works. 52.2Requirement for Contractor to keep records. 52.3SM may inspect Contractor records at any time within working hours. ## Secondary Options ### X1 – Price Adjustment for Inflation X1.1Defined terms – Base Date Index, Latest Index, Price Adjustment Factor. X1.2How Price Adjustment Factor is applied. X1.3/4Price adjustment for amount due. X1.5Defined cost for compensation events. ### X2 – Changes in law X2.1CE if occurs after the Contract Date. ### X3 – Multiple Currencies X3.1/2Payment and exchange rates. ### X4 – Ultimate Company Guarantee X4.1/2Given within 4 weeks of Contract Date. ### X10 – Information Modelling X10.1Defined terms. X10.2Contractor collaborates with other Information Providers X10.3Early warning requirement for anything could impact Information Model X10.4Submission of Information Execution Plan. X10.5Compensation events. X10.6Use of the Information Model X10 X10.7Client and Consultant liabilities. ### X11 Termination by Client X11.2Procedures and amount due to be paid. ### X12 – Multiparty Collaboration X12.1Identified and defined terms. X12.2Actions to be taken by Partners and Core Group. X12.3Collaboration by all Parties. X12.4Incentives – amounts paid to Partner if KPI(s) achieved. ### X13 Performance Bond X13.1Required as stated in CD1. ### X17 Low Service Damages X17.1For defects that miss performance levels. ### X18 – Limitation of Liability X18.1-3Limits of liability as stated in Contract Data part 1. X18.5Excluded matters that remain unlimited liability. X18.6Contractor only liable for matters notified before end of liability period. ### X20 – Key Performance Indicators and Reporting Requirements X20.1-5As per CD1. ### X21 Whole Life Cost X21.1Contractor can propose Scope change to reduce life cost of an asset. X21.2Contractor to submit quotation if SM prepared to consider change. X21.3Service Manager responds to quotation within period for reply. X21.5Service Manager changes Scope/Prices/revised plan accordingly. ### X23 Extending the Service Period X23.1By agreement Service Period may extended to maximum service period. X23.2Criteria for extensions need to be met to allow extension. ### X24 Accounting Periods X24.1Assessments made within 13 weeks of each accounting period. X24.2Service Manager assessments are conclusive unless dispute triggered. ## Schedule of Cost Components (for use with options C/E) 11-14Payments applicable for people. 21-28Payments applicable for Equipment. 31-32Payments applicable for Plant and Materials 41Payments applicable for Subcontractors 51-53Cost of charges paid or received by the Contractor. 61Cost of manufacture of Plant and Materials by Contractor. 71Shared services outside the Service Areas. 8Insurance premiums and insurable events excluded from cost. ## Short Schedule of Cost Components (for use with options A) 11Payments applicable for people 21-27Payments applicable for Equipment. 31/32Payments applicable for Plant and Materials. 41Payments applicable for Subcontractors. 51-53Cost of charges paid or received by the Contractor. 61Cost of manufacture of Plant and Materials by Contractor. 71/72Contractor cost of design of works and Equipment outside Working Areas. 8Insurance premiums and insurable events excluded from cost. ## Abbreviations CD1Contract Data part 1 CD2Contract Data part 2 SMService Manger CECompensation event — Glenn Hide, 01/06/2026 [NEC4 TSC High Level User Guide Branded – GMH Planning](https://gmhplanning.co.uk/wp-content/uploads/2026/06/NEC4-TSC-High-Level-User-Guide-Branded-GMH-Planning-.pdf)[Download](https://gmhplanning.co.uk/wp-content/uploads/2026/06/NEC4-TSC-High-Level-User-Guide-Branded-GMH-Planning-.pdf)