Budget Busters in Data Center Design and Renovation (and How to Avoid Them)

Renovations pose special challenges.

By Maryellen Lo Bosco  

Whether they are managing new data center design or a renovation, successful facility managers aim to finish the work on time with a minimum of cost overruns. To avoid budget busters, all stakeholders must be involved from the planning stages and continue to communicate throughout the project. 

Renovation projects have the additional task of due diligence. A thorough investigation of the existing data center prior to a renovation will avoid nasty, expensive surprises once the work is underway. Otherwise, unknowns can lead to renovation cost overruns as conditions not immediately visible come to light once the work starts, according to Alan Lurie, managing director, data center project management, CBRE. 

Complications with scheduling also add cost to projects. For example, equipment such as generators, switchgear, and the like, can be massive and often take longer to construct than vendors claim, which creates delays and throws off the schedule. “When you have a big team of contractors on site and they are charging $250,000 per month, just for general conditions and staff, for every month you go over schedule you are adding that to the project,” Lurie says.

Poor documentation also adds to costs, Lurie says. If engineers and architects do not fully document what they need, cost overruns often result. For example, in a bid situation, anything that does not appear in the original documentation will cost extra as a change order. Similarly, when specifications don’t match drawings, equipment doesn’t fit properly, or there is not enough power for the equipment, more money will have to be remedy the situation.

When enterprise data centers are being built, miscommunication between an end user and project team can bust a budget. “Disconnects can come from the perspective of loading,” says Matt Danowski, associate vice president of CallisonRTKL. “How much load and capacity do we need? How much redundancy? How is it going to operate?” If you don’t pose the right questions to the right people during the design phase,” says Danowski, “there will be a disconnect.” The end user, often the IT staff, needs to be part of the discussion all the way through construction, since changes due to misaligned expectations increase cost and extend the schedule.

To avoid budget busters, facility managers should consider bringing on a commissioning agent early in the process, so that person is on board from predesign and design phases, through every stage of the project, to ensure the owner’s needs are being met. “If the designer, engineer, or contractor does something that is not conforming with owner expectations, it is picked up earlier rather than later,” Danowski explained.

Sometimes project components are not properly budgeted in the first place, says Lurie, and people are operating under mistaken assumptions. 

Identifying problems early, or even before they occur, is a primary strategy for avoiding cost overruns. “We try to identify the unknowns before they occur and develop workarounds,” Lurie says. For example, the market is so competitive now that it can take a year to get a generator, when in the past it would have taken four to six months. For this scenario, the workaround might be bringing in a temporary generator.

The critical path method or CPM, first invented in the 1950s and used by both business and the military, can help keep a project on track. Regular team meetings are vital so that everyone understands the critical path, the schedule, and what will be necessary to meet building owner expectations. 

When renovating an existing data center, a full site survey early on is necessary to understand what currently exists. Technology can help accomplish that task, says Terence Deneny, vice president, Structure Tone Mission Critical. Using BIM (building information modeling) and laser scanning makes it possible to measure an existing space precisely and create a 3-D model to give exact dimensions of the space and locate all devices, duct work, pipes, walls, floors, and ceilings, says Deneny. Such technology allows facility managers to compare original drawings with the actual space as it currently exists, since the two are almost always different. 

Despite sophisticated technology, renovations can still go over budget because of unknown factors. When revamping a data center, especially one located in an old building, Lurie notes, “you have no idea what will be behind the walls when you rip them open: asbestos, old copper? What are you going to find?” 

Oftentimes contractors don’t have enough time to find concealed conditions, behind dry wall or in ceilings, for example, and these problems add to the scope of the work and extend the timeline and, of course, increase costs. “If a company allows the contractors to conduct more due diligence and pays them for their time, they can do a much better job of understanding what the situation is before they start the work,” says Gary Cudmore, global director, data centers, Black & Veatch. When working in existing conditions, there will always be unforeseen circumstances, but “the degree to which they are impactful will depend on what condition is found and what the mitigation strategy is going to be,” says Cudmore. 

A recent renovation for a large financial company had to cope with spalling, a condition in which pieces of a structure begin to fall off. In this case the spalling came from a concrete beam that had not been installed properly. The team restored the structural integrity of the beam in one part of the data center, but not “in the back of the house,” where additional repairs would have required shutting down operations. “Because of mechanical ducts and conduits, we would have had to shut down the data center to remove those systems and wrap the beam,” Cudmore says. Needless to say, “shutting down a principal data center for one of the largest financial companies in the U.S. is a big deal,” Cudmore says. Since there was no immediate problem in the back area, the team advised a monitoring approach as the best strategy for that part of the renovation. 

Maryellen Lo Bosco is a freelance writer who covers facility management and technology. She is a contributing editor for Building Operating Management. 

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  posted on 6/4/2019   Article Use Policy

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