Issue link: https://cp.revolio.com/i/522582
THE DATA CENTER JOURNAL | 25 www.datacenterjournal.com be reluctant to depart from them. "Where we would express caution is a customer being too pushy with items that don't align with industry standards," Ruch said. "e insurances they carry, the training they apply on the job site and even the way they handle money throughout the project are all things that are affected when they are asked to vary too greatly from an industry-standard practice on agreements. Good CMs will decline a project when the terms being pushed get too far outside the norm." On the other hand, you shouldn't let a contractor dictate details without a ra- tionale. Ruch notes that a CM should have and provide a good reason for resistance to certain proposed terms of a contract. A lack of communication at this point in the process could be representative of how the entire project will proceed, so caution is warranted. Ruch suggests that custom- ers who are dissatisfied with the contrac- tor's lack of explanation for pushback on certain contract terms may have a good reason to walk away from the negotiations. ContraCt gotChas According to Ruch, a lack of scope in a contract can cause numerous difficulties for the project, but such shortcomings can be amended. "Any construction agreement should be closely tied to contract docu- ments from the design team. In the case of a fast-track project where the contract document may not be complete at the time of contract execution, careful attention must be paid to defining scope in other methods," he said. For instance, "It may be necessary to provide additional narrative information forming a basis of design or outline specifications as additional exhibits to the more formal contract documents that have been issued at that point in the project. Design narratives and basis-of- design documents can go a long way to establishing the scope without complete documentation." Identifying other potential prob- lems that may or may not be specific to a given project type is where experienced design and legal professionals can help. ese parties can point out contract areas that are vague or ambiguous, or that may impose responsibilities you are unaware of or may be unclear about. Naturally, disagreements can and do arise in projects, whether owing to problems in the contract or another reason. An important area of the contract, therefore, is the portion that deals with resolving disputes. "Generally speaking the types of disputes that arise from a construction project don't escalate to the point where litigation makes sense. e costs of litiga- tion are typically disproportionate to the potential cost to resolve the problems on site," said Ruch. erefore, it's helpful to be familiar (and comfortable) with the terms the contract lays down regarding how such disputes are to be addressed. "A well-written construction contract should stipulate the available options for dispute resolution. Better agreements include some options like mediation or arbitration as a requirement prior to actual litigation." Good relationships among those working on a particular project may be the best defense against the inevitable tensions that arise in such a large-scale situation. For such reasons, the choice of a data center contractor is critical, and selecting one with whom you already have a busi- ness relationship (if possible) can make a huge difference. Customer involvement in the subcontracting process can also be beneficial in this regard. Nevertheless, a company that is building its first data center isn't at the whim of contractors (and vice versa). "e construction process involves a number of industry-standard processes and proce- dures designed to protect all parties in cas- es of problems," said Ruch. "If the project is being managed properly, there should be enough documentation of all issues to avoid litigation. Most of our projects use the family of agreements designed by the American Institute of Architects. ese agreements coordinate the roles of the owner, the design team and the contractor through the course of a project, including proper documentation. ey are a great place to start with regard to protecting yourself in the event of a problem." ConClusions e data center construction contract is a huge deal—not only does it involve lots of money on the part of the customer, but it involves lots of time and labor on the part of contractor, as well as lots of risk on both sides. Perhaps the most important key to a good contract is getting advice from design and legal profession- als that have experience with projects similar to the one at hand. Like any field, construction has its own peculiarities, so familiarity with common industry practices is critical in a good adviser (legal or design). In such a complex project, issues will likely arise, but they need not become project killers. e better the contract, the less likely a minor issue or disagreement will become a serious problem. A good contract will provide remedies for both sides in the event of a dispute, typically without resorting to litigation. Again, however, getting the benefits of a good contract requires reasonable negotiation with the contractor and reliance on expe- rienced legal and design counsel to ensure that the agreements you sign are what you expect them to be. n Good relationships among those working on a particular project may be the best defense against the inevitable tensions that arise in such a large-scale situation. For such reasons, the choice of a data center contractor is critical, and selecting one with whom you already have a business relationship (if possible) can make a huge difference. Customer involvement in the subcontracting process can also be beneficial in this regard.