Payment transparency
Maximising effectiveness of contractual protections
IPEX
Strengthening existing legal protections
The suite of industry-standard rights and responsibilities (‘stat decs’ for confirming subcontractors have been paid, ‘step in’ rights) have proven to be largely ineffective in preventing construction industry payment problems. There are countless instances where a builder has entered administration, leaving behind subcontractors and suppliers that are owed large sums of money across multiple progress claims.
Without oversight or control over how progress payments are being distributed by the builder, developers are forced to accept builder statutory declarations at face value and continue to make payments.
Often, by the time a developer has sufficient information to confirm that subcontractors have not been paid, it’s too late to act on or make effective use of their legal protections.
Using IPEX
Benefits for developer clients
About IPEX
IPEX combines a range of practical controls with existing legal protections to greatly reduce the risk & impact of builder insolvency for developers. The IPEX payment platform provides developers with real-time visibility over who has been paid (& who has not), preventing liabilities from quietly accumulating on their project.
IPEX allows developers to:
- avoid engaging builders’ that are already in financial distress
- ‘silo’ funds paid to your project from all others linked to your builder
- validate ‘Cost to Complete’ forecasts against actual cash outflow
- identify & resolve subcontractor payment issues before further claims are approved
- detect funding gaps before they become defaults
IPEX payment transparency creates a natural ‘go/no-go’ checkpoint each month: risk is capped to a single payment and, in the case of more serious/repeated breaches, developers have access to the right information at the right time to act on existing protective clauses i.e. ‘step in’.
All transactions are documented, providing a clear audit trail in an external administration/insolvency situation, allowing prompt execution of an effective remedial response. Builders are typically not required to reveal commercially sensitive information like subcontract values, payment amounts or their margin, making acceptance of payment transparency by ‘solvent’ builders a non-issue.
Developers/lenders can also negotiate the inclusion of additional controls over both the access to & the distribution of progress payments for high(er) risk applications.
Implementation including head contract & specific project settings
- IPEX provisions (head contract clauses & Declaration of Trust) are included in the head contract (or any deed of variation) – sample head contract clauses can be obtained from IPEX
- The parties agree to the level of access, oversight & functions available & in use via the IPEX Settings Form. – a sample IPEX Settings Form can be obtained from IPEX
- Standard builder obligations re: payment of subcontractors remain unchanged
- There is no change to subcontractor claim process, builder claim process or QS assessment / approval process:
- IPEX does not materially change the agreement between a developer and their builder, it just provides a range of practical controls to ensure they are always operating within it.
$2B+ in funds protected and counting
Testimonials
What our customer say
