Builder solution

Helping 'honest' builders win

IPEX

Stops being undercut by ‘distressed’ competitors and start new projects cashflow positive

Frequent, high-profile insolvencies continue to prove that the construction industry’s commercial payment model is broken. Unfortunately, it’s also made many developers and lenders nervous.

Insolvency concerns mean that all builders (including the honest ones) continue to be subject to the same risk-mitigating payment terms, impacting builder cashflow and liquidity.

IPEX helps builders to ‘prove’ their financial position and remove insolvency concerns for developers and lenders. IPEX strongly deters distressed builders from tendering, increasing the chance that contracts go to ‘honest’ builders under fairer commercial terms.

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Project protection

IPEX helps developers find the 'honest' builders

IPEX is an online payment platform that ensures progress payments can be used only to pay approved subcontractors and suppliers linked to that specific project. IPEX also provides developers with visibility over who has been paid and when, without sharing a builders’ commercially sensitive information*. IPEX acceptance is fast becoming a primary driver of builder selection for many developers and lenders.

*Standard developer portal view shows payment values as % of contract value / Open book developer portal view shows exact payment amounts.

Differentiate your bid

Agreeing to work under IPEX ‘proves’ what standard due diligence can’t: that you have the financial capacity to complete existing projects without diverting funds from this project.

Fairer commercial terms

From modified security requirements to cash in advance for site establishment and certain material deposits, builders are starting IPEX projects in a cashflow positive position.

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Using IPEX

Additional benefits for builders

Differentiate your bid by ‘proving’ your financial position

Remove distressed builders from any tender

Start projects in a cash-positive position

Supplier deposits may be funded by the developer

No need to reveal margins or payment values

No change to builder processes and no impact on builder payment

Attract best trades by reducing non-payment risk

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Register

Become an IPEX ready builder

Register for invitations to work on upcoming projects using IPEX developers are now specifying IPEX on future projects and are looking for builders who are willing and able to operate within the IPEX framework.

If you’d like IPEX to promote your business to our developer network, please review the IPEX framework below and confirm that you are ‘IPEX Ready’.

Builders that can ease insolvency concerns have a huge advantage in any tender

Stop losing contracts to ‘low-ball’ bids from distressed builders
Win more tenders
Start new projects in a cash positive position
Improve cashflow

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Most builders have endured a run of loss-making projects in recent times; combine this with a lack of new commencements and some are desperate for a new contract.

‘Good’ builders are increasingly losing contracts to builders that are in survival mode: how do you compete with a builder who has no intention of making a profit and is willing to accept risks that no rational builder would or should just to keep the lights on?

Not only does IPEX serve to help ‘good’ builders to stand out, it effectively removes dishonest competition; distressed builders will always fight the use of IPEX – this response helps to identify them and rule them out.

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Market conditions continue to place significant strain on builder finances, leading to calls for changes to the way builders are paid. In reality, insolvency concerns will only ever worsen builder liquidity, with all parties holding funds back to protect their own position.

IPEX changes this. Once a developer/lender can be sure that progress payments will reach the subcontractors and suppliers linked to each claim, other builder payment models become possible.

Under IPEX, developers are regularly agreeing to an initial upfront payment to their builder of between 1% and 2.5% of head contract value* for site establishment costs and/or funding certain long lead time material deposits. These payments are allowing builders to lock in material costs early and start the project in a cash positive position.

*Not an IPEX system feature. All contract terms/payment conditions are to be agreed between the developer and builder on a project-by-project basis.

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“We offer IPEX because it allows us to prove our balance sheet is strong and differentiate us from those who might be ‘misrepresenting’ their current financial position.

All any builder really wants is to get paid what they’re entitled to, and IPEX doesn’t affect our payment. Yes, it puts subcontractor entitlements off limits but that has no practical impact on us as we’ve never relied on that money – we always pay our subcontractors on time.

It’s also tough to attract subbies in this market so removing their risk of non-payment doesn’t hurt either. Unless a builder is already in a fair bit of trouble, I can’t see why a request to work under IPEX would be an issue.”

IPEX developers

'IPEX ready' builders

What can the developer see under IPEX?

Most projects are run under the IPEX ‘standard’ view, which shows only who has been paid and when – no subcontract/payment values or margins are revealed.

No payment impact: everyone (including the builder) gets what they’re entitled to.

No change to builder process: Subcontractor/builder claim processes and QS assessment/approval process remain as is

The builder controls the project account and simply uploads the payment file into IPEX instead of normal banking platform
IPEX automatically cross checks the uploaded payment file against the account details of subcontractors and suppliers linked to the project, before the builder authorises payment

IPEX simply validates the ‘stat dec’ process – for builders that are already paying subcontractors and suppliers on time, nothing changes.

Testimonials

See 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