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IPEX as a preventative measure ‘Standard’ risk projects
The high value, low margin nature of construction means that very little needs to go wrong for a ‘healthy’ builder to suddenly find themselves under significant financial pressure – there is always a level of risk.
On ‘standard’ risk projects, developers typically run IPEX in a ‘builder-friendly’ mode; contract values, payment amounts and builder margins remain confidential. These developers’ just want to confirm that subcontractors and suppliers have been paid in line with expectations (QS assessment) before they approve further claims.
Practically, the level of transparency provided by IPEX standard portal view should not be of concern to any builder and most (~80%) agreements are implemented at this level. Developers also have the added protection of being able to escalate visibility levels should a ‘payment default’ event occur (as defined by the contract).
IPEX setting |
'Standard risk: Typical commercial set-up - Prevention focus |
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Developer portal view |
Standard view - no contract or payment amounts are visable* |
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Entities required to be paid through IPEX |
'Key' trades only as defined by the contract |
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Builder payment method |
Builder can immediatley access payment for prelim/margin/direct costs as per QS report. Balance of progress payments of approved subcontractors and suppliers. |
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Developer notification/approval of new payees |
Not required |
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Subcontractor validation of contract value |
Not required |
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Joint approval of subcontractor payment |
Not required |
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Subcontractor retention to be held under IPEX |
Required |