HELPING FINANCIALLY
SECURE BUILDERS
STAND OUT

HELPING FINANCIALLY
SECURE BUILDERS
STAND OUT

WHAT IS IPEX?

IPEX is an online payment platform that secures funds intended for a project, protecting Developers and Sub-Contractors in the event of Builder insolvency.

IPEX software integrates with a dedicated construction project bank account to ensure that progress payments are used only to pay approved Sub-Contractors & Suppliers linked to that specific project. IPEX provides Developers with visibility over who has been paid & when, without sharing a Builders’ commercially sensitive information.

Whilst IPEX protects Developer & Sub-Contractor payments, it also helps financially secure Builders to validate their money management practices, differentiating their bid from competitors in the process.

The IPEX Payment Platform provides Developers & Lenders with:

SECURITY

IPEX ensures that progress payments are used only to pay approved Sub-Contractors & Suppliers linked to their project
full financial oversight

TRANSPARENCY

IPEX provides Developers with visibility over who has been paid & when, without sharing a Builders’ commercially sensitive information*

Whilst IPEX eases the nervousness amongst Developers & Lenders created by multiple, high-profile insolvencies, Builders are now leveraging IPEX as a tool to prove their financial health & differentiate their bid from their competitors, helping to negotiate more favourable commercial terms.

THE CHALLENGE

With Builder insolvencies on the rise, Developers/Lenders aren’t sure who they can trust.

THE IPEX SOLUTION

Helping financially secure Builders stand out

THE CHALLENGE FOR BUILDERS

DEVELOPERS & LENDERS ARE NERVOUS

The recent wave of highly publicised insolvencies has cast doubt over all Builders; the issues of some causing all to be tarred with the same brush. This doubt has led to ever increasing scrutiny on Builder finances but ultimately, Developers know that they can never be sure; even Builders with great reputations are not immune to external market forces.

‘GOOD’ BUILDERS ARE BEING UNDERCUT BY THOSE WILLING TO ‘BUY’ PROJECTS

Tendering is competitive & without a key differentiator, assessment of bids is largely based on cost, requiring margins be kept low at the best of times. But when you’re competing against Builders who have no intention of making a profit on the project, you’re unlikely to be considered unless you’re prepared to match them with margins that leave you highly exposed.

DEVELOPERS ARE OFTEN RELUCTANT TO HELP COVER COST ESCALATIONS

When you’re working under a fixed price contact on narrow margins, any cost escalation hurts. It doesn’t take much to turn a profitable project into a loss-making one, but Developers and Lenders can be reluctant to help, questioning whether any shortfall is truly due to current market conditions impacting their project, or a case of Builder mismanagement.

IT’S DIFFICULT TO ’PROVE’ YOU DO THE RIGHT THING, SO YOU’RE PAID UNDER TERMS THAT ASSUME YOU DON’T

From providing financial information during due diligence to signing stat decs with every claim, Builders are already operating under various checks & balances, essentially being asked to ‘prove’ what they say is true. The problem is, none of these processes allow definitive verification & some Builders are willing to falsify responses, meaning all Builders (including the honest ones) are subject to the same risk-mitigating payment terms.

THE IPEX SOLUTION

IPEX ELEVATES YOUR BID ABOVE THOSE OF NON-IPEX CAPABLE BUILDERS

IPEX confirms what due diligence checks can’t; any Builder willing to operate under IPEX conditions is stating that they have no need or intention of diverting funds to other projects, potentially justifying a premium in terms of margin.

IPEX DETERS BUILDERS WITH CASH FLOW ISSUES FROM TENDERING

There is no motivation for a Builder with existing cash flow issues to attempt to ‘buy’ a project; why bother when you can’t use the money? IPEX levels the playing field, leaving only financially sound bidders in the race & encouraging contracts
to be awarded at fairer margins.

IPEX HELPS BUILDERS NEGOTIATE IMPROVED COMMERCIAL TERMS & REACH A CASH POSITIVE POSITION EARLIER IN THE PROJECT

Unlike typical risk-mitigation processes (i.e. stat decs), IPEX lets Builders prove they are doing the right thing, making change to several ‘standard’ payment processes possible. IPEX may help Builders to reduce security requirements in some instances, whilst also creating the potential for the release of funds in advance for site establishment/long lead time material deposits.

IPEX ENHANCES BUILDERS REPUTATION, HELPING TO ATTRACT SUB-CONTRACTORS & SUPPLIERS

Any Builder choosing to work under IPEX conditions is significantly lowering the risk of non-payment for Sub-Contractors & Suppliers, helping to instil trust & stand out as a Builder of choice in a market where labour shortages are widespread.

IPEX MAKES ANY REQUEST TO RENEGOTIATE FOR ADDITIONAL FUNDS MORE PALATABLE TO DEVELOPERS

Builders that find themselves in cash flow difficulty on a project may choose to bring IPEX to their client as a means of confirming that their request is genuine (a payment through IPEX doesn’t help their position on any other project) & increase their chances of securing the additional funds they need.

WHO WE WORK WITH

CASE STUDIES

ADDITIONAL BUILDER BENEFITS

full financial oversight

TRANSPARENCY WITHOUT SHARING CONFIDENTIAL INFORMATION

GIVES FINANCIALLY STABLE BUILDERS A HUGE COMPETITIVE ADVANTAGE IN ANY TENDER

MINIMISE ADMINISTRATION & MANAGE MULTIPLE PROJECTS FROM SINGLE DASHBOARD

AID QBCC/BIF COMPLIANCE

SUPPORTS REDUCED UPFRONT SECURITY REQUIREMENTS

SUPPORTS FUNDS BEING MADE AVAILABLE IN ADVANCE WHEN ORDERING LONG LEAD TIME MATERIALS/ITEMS

IPEX FOR BUILDERS

Builders log onto the IPEX portal to view Project & Trust Account balances, set Sub-Contractor/Supplier contract values & retention percentages & distribute all payments. Builders can also request payments for preliminary costs and any additional margin they may be entitled to.

BUILDER FAQS


There is no cost to Builders for using the IPEX platform.



IPEX payment platform costs are shared by Developer & the awarded Sub-Contractors. Costs are extremely low considering the level of payment protection that IPEX provides to each.



  1. Gain a Competitive Advantage in any tender & deter Builders with cash flow issues from tendering
    Backing your builds with IPEX can give you a competitive edge and help you win more contracts. Being willing to operate within the IPEX framework confirms to Developers & Lenders that you have no intention or need to divert funds to other projects – you can & will manage their investment responsibly, elevating your bid above non-IPEX capable Builders.IPEX also encourages contracts being awarded to legitimately priced bids with responsible margins built in. As IPEX prevents funds from being diverted to other projects, Builders who need to ‘buy’ a project simply will not bid.
  2. Meet Compliance Requirements & Reduce Administration
    For head contractors, managing multiple construction projects generates a huge administration overhead. From managing cash flow and juggling several budgets in a single account to distributing payments to a host of different stakeholders – recordkeeping and account management, can quickly become a full-time job. With IPEX, each project can be managed simply and separately through our intuitive payment interface, helping you manage project funds and pay stakeholders in seconds. With IPEX, you have all the tools you need to streamline project payments, avoid disputes, and record and monitor all transactions for your build.
  3. Promotion of ‘IPEX Ready’ Builders to our network of Developers
    Given all the talk in the media re: insolvency, there is significant interest from Developers in their running future projects through the IPEX platform. We are proactively looking for Builders who are willing & able to operate within the IPEX Framework so we can present alternate options to the Developer/Lender. These Builders will be added to our ‘IPEX Ready’ Builder List which will be widely distributed to our Developer network. Developers & Lenders will be able to search to see whether their preferred Builder is ‘IPEX Ready’ or, source new Builders that are willing & able to operate within the IPEX framework & invite them to bid.
  4. Build trust with Sub-Contractors & Suppliers
    IPEX also significantly lowers risk of non-payment for Sub-Contractors & Suppliers, helping to instil trust & potentially reducing their need for trade creditors insurance, encouraging more favourable pricing/terms for Builders


The process by which the Builder requests a progress payment remains unchanged. All standard QS approval checks & processes undertaken prior to payment approval also remain unchanged. The key difference is: once the progress claim is approved, the Developer will deposit the progress payment into the Macquarie Bank project trust account linked to the project rather than the Builders standard account. The Builder will be alerted once transferred funds have cleared & are ready for use.



The process by which the Builder processes Sub-Contractor & Supplier payments is unchanged except for the fact that Builders will upload payment file from their accounting software directly into IPEX platform for payment. The Sub-Contractor will be alerted once they have been paid.



The Builder will be automatically paid the agreed prelim & margin as a function of the amount paid out to verified Sub-Contractors & Suppliers. For example, if the agreed margin is 5%, the Builder will be automatically paid $5K for every $100K paid to Sub-Contractors and/or Suppliers. Should the Builder have preliminary costs approved by QS but not associated with a sub-contractor payment, these can be claimed in full via the IPEX ‘redraw’ function within the Builder portal. Additional margin can also be claimed via the ‘redraw’ function.



Standard operation of the IPEX platform allows Developers to see which Sub-Contractors & Suppliers have been paid & when, but not how much. Developers & Builders may agree to open book terms which would allow full transparency however.

Finally, should a Builder default on payment or enter administration, before practical completion of the project, ownership of the project trust account is transferred to the Developer, at which point all values will be visible.



Retention rates and caps can be set through IPEX. Retention money is automatically collected at pre-determined rates (typically 10% of each payment with a cap at 5% of total contract value) & is set aside in a separate trust account.



A Project Trust Account is an account through which all payments required by the construction contract are received and paid. Project Bank Accounts are now a legislated compliance requirement for many projects in Queensland & an increasingly used payment process on tenders nationally.



Builders will earn interest on money held in the Project Trust Accounts at competitive market rates.



The Project Trust Accounts are held with Macquarie Bank.



IPEX is a tool that, if used correctly, will assist Builders to meet their obligations under the new QBCC framework. Project Bank Accounts are now a compliance requirement for many tenders in the construction industry. IPEX provides a solution that helps head contractors meet all these compliance requirements to industry standards simply and efficiently.

Increasing compliance measures and legislations relating to project payments and claims bring more stringent requirements for financial management, which can further complicate things. Our online platform makes it easy to keep track of multiple projects storing all project payment information, project funds and documentation. As a project bank account, IPEX provides a solution that simplifies project payments to contractors so you can focus on what you’re good at: getting the build to completion on time and within budget.



Unlike a standard project trust account, the IPEX Payment Platform has an additional layer of security, which prevents the use of funds for anything other than payment of approved Sub-Contractors & Suppliers. Whilst there are penalties associated with doing so, there is nothing physically stopping the improper movement of funds out of a regular project trust account, limiting the level of protection it offers Developers/Lenders & Sub-Contractors/Suppliers. This added layer of protection is what gives Builders a significant advantage when in negotiations for a new contract.



IPEX is working with NCC Group, a global cyber security organisation, to ensure our technical solutions, processes, procedures and staff are at an appropriate level of cyber maturity. We will continue to enhance our privacy program to ensure our clients & customers receive the highest level of end-to-end security across the full data lifecycle, assured that IPEX is embedding privacy by design and default to meet and exceed any privacy obligations.

To learn more about NCC Group, please visit: https://www.nccgroup.com/au/


Learn more about IPEX