What are the key legal issues affecting construction documents for data centre projects?

9 July 2019

The value of the UK’s data economy is over £70 billion and this is only set to increase.  Digital Realty’s “The Data Economy Report 2018” estimates that there is a further £50 billion of untapped potential in this part of the UK economy.
 

As society’s electronic data storage requirements increase, so do the requirements for data centres.  These typically large buildings are used as secure locations to house computer storage systems containing valuable electronic data.  For those engaged in the procurement of data centre projects, there are specific considerations to bear in mind when preparing the construction documents:

  • The mechanical and electrical elements of data centre projects take front and centre stage and, therefore, it is common on such projects for the main contractor to be a mechanical and electrical specialist.  Specialist mechanical and electrical contractors are increasingly gearing themselves up in order to be able to take on this role, for example, by having in place the facility to procure a performance bond from a bond provider.
  • A key issue on such projects will be whether or not the contractor is prepared to take on responsibility for the design (prepared by the client’s retained mechanical and electrical consultant) which the contractor will then develop.  The client will want this in order to create a single point of design responsibility.  If the contractor is prepared to accept this, it will need to carry out a thorough review of the design prepared by the mechanical and electrical consultant in order to minimise the risk to which the contractor might otherwise be exposed by taking on liability for such design.
  • The pre-ordering of major items of plant will usually be necessary and a modular approach is not uncommon in order to allow the project to be deployed more quickly.  Therefore, the client needs to give consideration to advance payment bonds (to guarantee the payment against the contractor becoming insolvent) and/or vesting certificates (in order to vest the client’s ownership of the module so that it is easier to recover the module in the event that the contractor becomes insolvent before the module has been delivered to site).
  • Full testing and commissioning of the systems ahead of practical completion will also be critical.

If you are procuring or being engaged as a contractor to procure data centre projects, please do contact one of our Construction and Engineering Lawyers to review your contracts.  

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