Including construction management contracts/large domestic residential
Cost plus contracts
Cost-plus contracts are easily managed via IPEX; these are run under the open book setting which makes validation of costs/payments simple & is not controversial for builders given they’d need to provide evidence of costs regardless.
Typically, the builder receives an agreed percentage on every dollar paid out of the account (they have to pay their subcontractors & suppliers to get paid).
IPEX setting |
'Standard' risk: Cost plus set-up - Prevention focus |
|---|---|
|
Developer portal view |
Open book view - all contract and payment values are visible to the developer/lender |
|
Entities required to be paid through IPEX |
All subcontractors and suppliers outside of those identified as preliminaries or overheads to be paid via IPEX |
|
Builder payment method |
The builder will receive an agreed percentage (margin) automatically as each subcontractor/supplier payment is processed. |
|
Developer notification/approval of new payees |
Not required |
|
Subcontractor validation of contract value |
Not required |
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Joint approval of subcontractor payment |
Not required |
|
Subcontractor retention to be held under IPEX |
Required |