PROTECT YOUR CLIENTS AGAINST

THE IMPACT OF BUILDER INSOLVENCY

Although typically a developer-led decision, project managers are increasingly driving the implementation of IPEX to reduce the risk & impact of builder insolvency for their clients.

Whilst the primary motivation for these PM’s is to reduce client exposure, there is also a desire to avoid the significant reputational hit that comes with recommending the wrong builder.

IPEX helps to ‘test’ financial due diligence outcomes to reduce the risk of appointing a builder that is already in financial distress and, provides ‘ongoing’ protection should the builder run into trouble after they’ve signed the contract.

TRANSPARENCY
Developers/Lenders can verify who has been paid, when & how much* (including the percentage of contract value paid) before releasing further funds.

SECURITY

IPEX ensures that developer/lender funds can be used only to pay approved subcontractors & suppliers linked to that specific project.

You Can't Insure Against Builder Insolvency
But You Can Still Protect Your Project

IPEX is an online payment platform that integrates with a Project Trust Account to ‘ring-fence’ project funds & limit what a builder can do with progress payments. Given the recent wave of insolvencies, IPEX is working with developers & lenders to augment existing due diligence processes & protect funds against any potential cash flow issues their builder may encounter during their build.

‘Test’ builder due diligence outcomes to find ‘honest’ builders.

Stop payments from being used to cashflow other projects.

Validate ‘stat decs’ to confirm subcontractor payments.

Act on ‘step in’ rights before your builder goes under.

Protect funds already paid to builder in the event of insolvency.

No change to builder processes & no impact on builder payment.

Attract subcontractors by reducing risk of non-payment.

How Does IPEX Help Developers & Lenders?

‘TEST’ BUILDER FINANCIAL DUE DILIGENCE RESULTS TO FIND THE ‘HONEST’ BUILDERS

DD in its current form requires the developer/lender to satisfy themselves of a builders’ ability to meet existing contractual obligations. If the information they are basing this decision on is out of date, incomplete or fraudulent, they bear the consequences.

IPEX shifts the onus for any DD ‘gaps’ onto the builder; those willing to accept the condition of ‘ring-fenced’ funds are essentially ‘proving’ their financial status; those that have misrepresented their true position will fight IPEX inclusion & likely withdraw.

PREVENT PAYMENTS BEING USED TO CASHFLOW OTHER PROJECTS & ACT ON ‘STEP IN’ RIGHTS EARLY

IPEX adds practical controls that prevent a builder from using progress payments to cash flow another project, even if they’re in extreme financial distress. Builders can access payment for their preliminaries, margin & any direct costs, but funds equal to the value of works performed by subcontractors are set aside & off limits.

IPEX also allows developers to confirm every subcontractor & supplier payment. If your builder submits a ‘stat dec’ claiming to have paid someone they haven’t, you can identify it immediately & take action before approving the next claim. In the case of more serious/repeated breaches, you’ll have the information you need to act before your builder enters administration.

PROTECT FUNDS ALREADY PAID TO THE BUILDER IN AN INSOLVENCY EVENT

Should a ‘payment default’ event occur before completion of an IPEX protected project, the impact to developers & lenders is minimised as:

Any payment made to the builder via IPEX has either been distributed to approved parties or remains in the account
The developer can replace the builder as trustee of the project funds, gaining full visibility of all previous transactions & the ability to make payments directly to subcontractors/ suppliers, minimising delays to practical completion

$1B+ in funds protected and counting

IPEX Project Applications

PREVENTION FROM DAY 1:
PROTECT AGAINST FUTURE BUILDERS’ CASHFLOW ISSUES

Guard against the potential impact of other, less-feasible developments linked to your builder
Additional protection when working with a builder for the first time or builder is ‘stepping up’ a level
Provide lender comfort should builder due diligence has raised minor red flags
Provide lender comfort on developer-builder projects

MID-PROJECT IMPLEMENTATION:
GUIDE ‘TROUBLED’ PROJECTS TO COMPLETION SAFELY

‘Controlled’ payments to assist your builder with funding supplier deposits
‘Ring-fence’ additional payments outside of the
contract to ensure they’re spent on your project
Move forward with the builder despite substantiated instances of non/delayed payment of subcontractors or suppliers

What Our Customers Have to Say

"At Frasers, we take our commitment to every project, and every investor, builder, subcontractor, supplier, and customer we work with seriously. That means putting in place financial frameworks and processes to ensure that every dollar is used for its intended purpose, and there is full accountability and transparency over the budget for a project.” “We’re so excited about the Encompass development, which has a real ‘wow’ factor, and through IPEX we’re better positioned to deliver the project securely and successfully.”

Sarah BloomGeneral Manager Development Victoria

"From the moment I understood what IPEX provided I had no hesitation in introducing it to BlueScope. With such a major capital works project it was clearly a very prudent risk management tool. With hundreds of millions of dollars being paid to suppliers and subcontractors through major contractors, securing certainty that monies were being delivered into the accounts of the substantial number of subcontractors and suppliers was critical.“

Steve ChandlerCEO

"After a year of utilising the IPEX platform on one of our key commercial construction projects, the experience has been overwhelmingly positive. The platform’s user interface and our customer service experience have exceeded our expectations, significantly bolstering the security and efficiency of our collaboration with the builder. The adoption of IPEX has been embraced by the builder and & it provides additional comfort to trades particularly with the current construction industry challenges."

John VickersDirector

“Based on our experience IPEX should be mandatory. It is now an integrated and essential part of our governance. It’s delivering a new standard of providing trust downstream to our subcontractors and suppliers that they’ll be paid and upstream to our clients and the financial institutions funding these projects.”

Ken O’ConnorDirector

“IPEX delivers the security of funds subcontractors need on projects. Everyone prices risk into jobs; however, with the IPEX concept, there is a reduction of payment risk, which should translate into a more competitively priced trade insurance outcome. It’s really in everyone’s best interests in the long run to use IPEX.”

Sam LeslieGeneral Manager

“Once we were aware of IPEX and decided to implement this new standard for project payments, it was a seamless onboarding and end-user experience. It reduces risk and addresses trust and relationship building in one platform. This will put us in a powerful position as the demand for construction labour increases.”

Rob MoolmanManaging Director