NEWS FROM SBI

This rapid growth faces real constraints: limited power availability, strained supply chains, and rapidly evolving technology that drives design. SBI Consultants works alongside Owners, Developers, and Builders to manage these challenges through disciplined project controls helping them deliver mission-critical facilities on compressed schedules.

Project Controls Under Pressure?
SBI Consultants Recommends Five Ways to Mitigate Risk in Data Center Construction.

The pressure to reach go-live is driving creative approaches to equipment procurement and construction sequencing, but creativity without control is how projects lose money and time. Effective project controls are what turn an aggressive schedule into an achievable one. Across our data center work, several strategies consistently help Owners identify and mitigate risk:

1 Early Procurement. Given the accelerated schedule of data centers, long-lead electrical and mechanical equipment such as transformers, switchgear, generators, and cooling systems must be purchased before the design is complete. The typical data center construction sequence starts with the power strategy, followed by a basis of design and early procurement. Full design development comes next, and the construction contract follows.

Owner-furnished equipment programs and early framework agreements with manufacturers can secure production slots, but they also shift risk to the Owner. That risk must be managed deliberately. After careful project risk analysis, SBI Consultants recommends calculating a commensurate design contingency to absorb unknowns that arise as drawings and specifications are refined.

2 Change and Design Management for Evolving Technology. The rapid evolution in technology and tenant requirements makes change inevitable. A disciplined change process captures cost and schedule impacts promptly. It helps Owners understand revised forecasts, facilitates timely decision making, and ensures competitive pricing is provided.

For instance, traditional data centers typically run around 10-20 kW per rack. Driven by AI demand, data hall densities are climbing to roughly 30 kW per rack and are expected to reach 50+ kW for the newest AI systems. At these densities, conventional air-cooling struggles to remove heat efficiently, and direct-to-chip liquid cooling is emerging as the more effective alternative. This shift directly affects design, equipment sizing and equipment selection, requiring project management teams to track these trends closely and account for them in the design, budget, and schedule.

3 Labor Shortage Mitigation. These megaprojects consume meaningful portions of regional electrical and mechanical trade capacity. SBI Consultants is observing more Owners build labor incentives into their budgets to attract skilled trades to project locations.

4 Cost and Schedule Integration. Cost and schedule cannot be managed in separate silos. Procurement decisions, sequencing changes, and acceleration strategies are best evaluated together to allow Owners to see the true cost of speed, weigh the tradeoffs, and make informed decisions.

5 Benchmark-Based KPIs and Reporting. Benchmarking against similar projects provides a valuable performance check. Once normalized for location and time, and adjusted for project-specific factors, benchmarks can confirm that the scope is complete and that KPIs are competitive and in line with industry standards.

During execution, SBI Consultants recommends live dashboards that pull data from the Owner’s and contractor’s project management systems. This approach gives executives a clear, objective view of current project status and forecasted trends.

The Bottom Line

The data center boom is creating extraordinary opportunities, but it is also exposing the limits of traditional delivery approaches. Power constraints, workload-specific design, supply chain volatility, and labor shortages all compound on schedules that leave little margin for error.

In this environment, project controls are not administrative overhead. They are a strategic capability. The Owners and builders who invest in rigorous design management, procurement strategies, risk analysis and mitigation, integrated cost and schedule management will be the ones who reach go-live on time and deliver facilities that perform over their full lifecycle.

“Where are owners losing the most money right now?”, the moderator and colleague from Withum, Peter Hilera, asked me during the Bisnow South Florida Construction & Development Forum.

The answer can be found at different levels of the process.

At the micro level, the industry is struggling with skilled workforce shortages that affect every stage of project delivery. These shortages often result in incomplete design documentation, inadequate project management, and inconsistent final quality, creating uncertainty for developers and owners as they make critical decisions.

As active members of project teams, we see too much time spent interpreting basic industry best practices that should already be standard. Many tradespeople lack the training and experience needed for efficient field execution, and many leaders rush workers into the field before they are fully prepared.

I have witnessed this decline in field expertise over the past 15 to 20 years. In an ideal world, a skilled foreman or project management engineer should know more about practical execution than the design team member who prepared the drawings, but this is not always the case.

Project teams also lose valuable time debating deliverable expectations, such as what should be included in 30% design-development documentation and coordinating meetings when a simple phone call could resolve the issues at hand. Varying standards in bureaucracy and manufacturing further contribute to delays and added costs.

At the macro level, insurance rates have skyrocketed. The industry, as a whole, is paying a 5 – 6% premium for insurance coverage. To put this in perspective, the use of better materials generally leads to increased value, whereas a $100MM project will cost $5MM more in insurance for no real value added, culminating in the reduction of critical programming. This is not inclusive of the tariff and shortages currently affecting projects.

This chicken or egg dilemma is hard to solve. Are we paying a premium for insurance because of the micro trends? Can we as an industry come to an agreement to prioritize project hard and soft costs to invest in the right buckets vis-à-vis training workers to better control workflow, communication, and quality which will result in lowering this upward pressure on project costs?

These questions remind me of the second project of my career in the late eighties. The Intercontinental Hotel in downtown LA had approximately 419,000 GSF with 469 guestrooms and an extensive amenities program that had to be built with a significant foundation easement over Third Street. As GC, we completed the project in 24 months, from the start of excavation to first guest, three months ahead of our GMP contractual plan. With all the technology that we have at our fingertips, can we build today with the same or better efficiency and are we really doing projects better and faster?

I welcome your input and the opportunity to affect real change.

The AACE International Conference & Expo brought together project controls professionals, cost engineers, schedulers, and construction leaders from around the world to discuss the latest trends shaping the industry. Through technical sessions, networking opportunities, and knowledge sharing, the conference highlighted how technology and data continue to transform project delivery.

One of the most significant themes throughout the conference was the growing role of artificial intelligence (AI) in project controls. Organizations are moving beyond simply adopting AI and are instead focusing on AI readiness, governance, and responsible implementation. The emphasis is on leveraging AI to improve scheduling, cost management, risk analysis, forecasting, and reporting while maintaining accuracy, consistency, and trust.

The conference also reinforced that escalation and supply chain challenges remain key concerns across the construction industry. Speakers emphasized that proactive procurement planning, strong project controls, and effective risk management are essential to minimizing disruptions and keeping projects on track.

Another major takeaway was the increasing demand for integrated data visualization. Project owners and decision-makers are looking for dashboards that consolidate information from multiple construction platforms, providing real-time insights that support faster, more informed decisions throughout the project lifecycle.

Beyond the educational sessions, the conference offered valuable opportunities to connect with professionals from across the United States and around the world. Conversations with industry peers reinforced the importance of collaboration, continuous learning, and sharing best practices as the AEC industry continues to evolve.

Attending events like the AACE International Conference & Expo helps our team stay informed about emerging technologies, industry trends, and proven project controls practices. We look forward to applying these insights to deliver greater value, innovation, and successful outcomes for our clients.