A short lesson sequence. Work the notes in numbered order; each builds on the last.
Part II: The Craft. The commercial terms that allocate risk: who buys, who installs, who pays when things go wrong.
Assumes: Hubs 05 and 06. Contracts formalize sourced, costed deals — the commercial logic comes first.
Learning path
07.10 OFCI, CFCI, and OFOI as Risk Allocation
Builds on 03.10's mechanics: what actually moves with the split — vendor leverage, cash timing, schedule control, insurance coverage in transit and storage, and the warranty handoff. Why the industry is shifting toward owner-direct buying for long-lead equipment (lead-time control, fewer markup layers) — and what the owner inherits with that control, including liability for late or damaged delivery. Builds on: 03.10 (the mechanics), 05.10 (why owners take control).
07.20 GMP Contract Mechanics
How guaranteed-maximum-price contracts really work on data center builds: cost reimbursement plus a cap, shared-savings clauses, open-book accounting, the contractor's overrun risk — and the failure mode, where signing a GMP against an incomplete design produces 8-14% change orders versus 3-5% at a proper design freeze. Matching contract form to design maturity instead of using GMP as a substitute for scope definition. Builds on: 03.40 (the delivery models), 07.10 (the risk-allocation logic).
07.30 Liquidated Damages and Liability Caps
The enforcement layer: delay damages accruing daily past milestones, performance damages for capacity/PUE/availability shortfalls, overall liability caps (typically 30-50%), and why damages must genuinely pre-estimate the owner's loss to be collectible. What lenders demand in EPC structures — fixed dates, fixed prices, LDs for both delay and performance — and how owners and contractors negotiate fault allocation when delays are rarely one party's alone. Builds on: 07.20 (the GMP contract), 03.40 (EPC structures).
07.40 Data Center SLA and Performance Terms
The commercial terms that define what "working" means: uptime commitments and their link to Tier topology (Tier III ≈ 99.982%), service credits of 5-30% of monthly fees per incident capped at 50% of one month as sole remedy, and why Tier classifications are unenforceable until the SLA defines measurement, exclusions, and remedies. Extends to O&M agreements — reliability KPIs, response/resolution windows, deduction mechanics. Builds on: 01.30 (the Tier topology), 07.20 (the contract structure).
07.50 OFCI Contract Administration
Making OFCI work after signature: the OFCI tracker as the single source of truth, contract terms for delivery timelines, receipt and inspection obligations (open and inspect on delivery, not box-counting), storage and protection responsibilities, FOB shipping-point vs. destination liability. The warranty finger-pointing problem — manufacturer blames installation, contractor blames product, owner pays for the investigation — and how documentation discipline prevents it. Builds on: 07.10 (the split), 03.60 (FAT/SAT receipt).
07.60 Contract Novation
Moving a live contract from one party to another without breaking it: all-party consent, deeds of novation, and why "deemed" novation without paperwork transfers liabilities you didn't bargain for. Novation vs. assignment — the legal mechanics, applied in 10.20 to the procurement-transition use case. Builds on: 07.10-07.50 (the contracts being moved).
07.70 Insurance: Builder's Risk, Transit, and Delay
Who insures what under each procurement split: builder's risk during construction, transit and storage coverage for OFCI equipment (the owner's gear, the owner's risk), and delay-in-startup coverage. Why OFCI shifts insurance obligations to the owner — and what to verify before the first shipment leaves the factory. Builds on: 07.10 (the split determines who insures).
Key sources: Global Data Center Hub on EPC/O&M/SLA structures; JD Supra on cost accountability in construction disputes; Young Architect Academy on OFCI; Practical Law on novation.