Data center construction projects are, to put it mildly, distinct. They differ from traditional construction in a host of manners, and are particularly distinctive because the value of the facility depends on unique measures of performance. A center that cannot meet uptime, cooling, redundancy or connectivity standards will not achieve its mission, whether or not the structure itself meets standard industry contract-form “substantial completion” or “mechanical completion” definitions.

Owners, developers, lenders, operators and hyperscalers—especially hyperscalers!—want it all. They seek favorable and stable pricing, accelerated delivery and sophisticated components, all of which are evolving in “real project time.” Standard construction contract forms deserve extensive modifications to align clauses with expectations, with a heightened focus on systems integration, commissioning, and allocation of special risks. This article details customized considerations for drafting, negotiating and administering data center design and construction agreements.

Reprinted courtesy of James P. Bobotek, Pillsbury, Arielle L. Murphy, Pillsbury and Robert A. James, Pillsbury

Mr. Bobotek may be contacted at james.bobotek@pillsburylaw.com
Ms. Murphy may be contacted at arielle.murphy@pillsburylaw.com
Mr. James may be contacted at rob.james@pillsburylaw.com