Corven & Ashby, cost and risk advisory

Phased handover data center construction promises, and what it depends on

Schedule and delay

Phased handover data center construction schedules promise revenue before the building is finished. Every one of those phases depends on permanent power, and permanent power depends on a party that is not in your contract.

Why phasing is promised

A data center earns nothing until it serves load. A building that takes twenty six months to complete and then starts earning is a very different investment from one that starts earning in month eighteen with a third of its capacity live.

So phasing is not a construction preference. It is the financial structure of the project, and it is usually promised to a customer or a lender before the construction contract is signed.

The construction sequence can support it. Data halls are repetitive and separable, electrical distribution can be zoned, and cooling can be brought online in stages. None of that is unusual.

What phasing depends on is not the construction sequence. It is a short list of items that have to be complete for any load to be served at all, regardless of how much of the building is finished.

That list is the same on every project and it is worth knowing before the phasing is promised rather than after.

Everything below is that list and what each item depends on.

What phased handover data center construction actually requires

Permanent utility power. The single item. Nothing serves load on temporary power at scale, and the utility timeline is outside the contract, outside the contractor control and frequently outside the owner ability to accelerate. Substation works, transformer delivery and utility crew scheduling all sit here.

Standby power complete and tested. Generators, fuel, transfer and paralleling have to be commissioned for the phase being handed over, not just installed.

Cooling for that phase. Including the plant, distribution, and the controls that link them, which are frequently the last item and the most underestimated.

Fire detection and suppression. Complete and accepted for the occupied area, which usually means the whole building rather than the phase, depending on the system and the jurisdiction.

Certificate of occupancy for the phase. Whether the jurisdiction grants partial occupancy at all, and on what conditions.

Integrated systems testing. The full load test across mechanical, electrical and controls together, which is the last thing to happen and the thing most likely to find something.

The item that is not in your contract

Five of those six are contractor scope and can be scheduled, resourced and accelerated in the ordinary way.

Permanent power is not. The utility works to its own program, with its own resource constraints and its own equipment lead times, and it is frequently building a substation or upgrading a feeder for you as one project among many.

The commercial consequence is that the most important date in a phased handover plan is the one date nobody in the contract is responsible for.

What can be done about it is limited but real. The application can be made earlier than anybody thinks necessary. The utility requirements can be confirmed in writing rather than assumed. The equipment the utility needs from you, pads, ducts, easements, can be identified and delivered early. And a named person can own the relationship, because utility timelines respond to attention in a way that contracts do not.

What cannot be done is to schedule it like a construction activity, and a schedule that shows energization as a fourteen day bar with float on it is describing a wish.

The general form of this problem, a date behind the date, is in long lead items and the date behind the date.

A worked example

Example only14 weeks

Illustrative figures. Not taken from any client project and not a quotation.

A facility with three phases, the first promised to a customer in month eighteen with a rent commencement attached.

The construction schedule supports it. Phase one data hall, its electrical rooms and its cooling are complete in month sixteen, with two months of float before the promised date.

Permanent power is shown as an activity in month fifteen with no predecessor other than the electrical room being ready.

The utility, asked in month nine, confirms a transformer lead time of eleven months from a formal application that has not yet been made, plus six weeks of switching work that can only be scheduled in a maintenance window.

Energization lands in month twenty one. Phase one handover slips fourteen weeks and the customer rent commencement slips with it, along with a contractual conversation nobody wanted.

Everything the contractor was responsible for was early. The date that mattered belonged to somebody who was never asked until month nine.

What a phasing plan should contain

One page per phase, and the same six headings.

What is being handed over, described as a capacity and an area rather than as a phase number. What has to be complete for that capacity to be served, from the list above. Which of those items is outside the contract. The date each one is required, worked backward from the handover. The evidence that each is achievable, meaning a written confirmation rather than a bar on a chart. And what happens commercially if the phase slips, which is where the lease or customer agreement has to be read against the construction schedule.

The sixth heading is the one that makes the other five worth producing. A phase that slips with no commercial consequence is a scheduling matter. A phase that slips with a rent commencement and a termination right attached is a different object, and the two should not be managed the same way.

Producing this page takes a morning once the schedule and the customer agreements are on the same desk. On most projects they never are, because one lives with the construction team and the other with the commercial team.

That separation is the actual cause of most phasing failures, and it is organizational rather than technical.

What to do before you sign

  1. Write the six requirements for each phase, and mark which are outside the construction contract.
  2. Make the utility application before the amendment is signed, not after.
  3. Get the utility timeline in writing, including transformer lead time and switching windows.
  4. Confirm in writing whether the jurisdiction grants partial occupancy, and on what conditions.
  5. Establish whether fire suppression acceptance applies to the phase or to the whole building.
  6. Schedule integrated systems testing as a real duration with real float, not as a milestone.
  7. Name one person who owns the utility relationship and report on it monthly.

Item two is the highest value item on this list and the one most often deferred, because making an application feels premature before the design is final. The application starts a clock that is longer than the construction, and starting it early costs an administrative fee.

Item six catches the failure that happens at the very end. Integrated testing is where a building finds out whether it works, and a schedule that allows two weeks for it on a facility of any size is allowing time to pass rather than time to fix anything.

How this reading is scoped sits in the review packages.

What we do

We read the phasing plan against the schedule and against the commercial obligations behind each phase, and identify which requirements sit outside the construction contract entirely. The output states, for each phase, what has to be true, who owns it and what the evidence is. It is a commercial reading rather than a planning exercise and we do not rebuild the schedule. The work is the schedule and procurement risk review.

Questions people ask

Can a data center be handed over in phases?

The construction sequence usually supports it, because data halls are repetitive and separable. What limits phasing is the short list of items that must be complete for any load at all: permanent power, tested standby power, cooling for the phase, fire suppression acceptance and partial occupancy.

Why is permanent power the critical item?

Because it is the only one on the list that nobody in your contract controls. The utility works to its own program with its own equipment lead times and crew scheduling, and it cannot be accelerated by adding resources the way a construction activity can.

When should the utility application be made?

Before the construction amendment is signed. The application starts a clock that is frequently longer than the construction itself, and making it early costs an administrative fee. Deferring it because the design is not final is the most common and most expensive scheduling error on this building type.

Posted in Schedule and delay Data centers Schedule Energization Phasing

This is general information about construction contracts and is not legal advice.