Long Lead Equipment (LLE) procurement is key when building data centres.
Here are 3 key things to consider.
๐ช๐ต๐ฎ๐ ๐ถ๐ ๐๐๐?
LLE is equipment that requires a long time to procure and get to site.
Generally it takes so long that it doesn’t fit the construction program so the client needs to purchase LLE early, to ensure it is delivered to site on time.
Additionally, data centre clients want to maintain control of the specification and selection of key components (e.g. generators, chillers, etc) so they will procure and ‘free issue*’ these components to the contractor to install.
*๐๐ณ๐ฆ๐ฆ ๐ช๐ด๐ด๐ถ๐ฆ ๐ช๐ด ๐ฆ๐ฒ๐ถ๐ช๐ฑ๐ฎ๐ฆ๐ฏ๐ต ๐ช๐ด๐ด๐ถ๐ฆ๐ฅ ๐ต๐ฐ ๐ต๐ฉ๐ฆ ๐ค๐ฐ๐ฏ๐ต๐ณ๐ข๐ค๐ต๐ฐ๐ณ ๐ธ๐ช๐ต๐ฉ๐ฐ๐ถ๐ต ๐ค๐ฐ๐ด๐ต (๐ง๐ณ๐ฆ๐ฆ), ๐ธ๐ฉ๐ช๐ค๐ฉ ๐ต๐ฉ๐ฆ ๐ค๐ฐ๐ฏ๐ต๐ณ๐ข๐ค๐ต๐ฐ๐ณ ๐ต๐ฉ๐ฆ๐ฏ ๐ช๐ฏ๐ด๐ต๐ข๐ญ๐ญ๐ด.
Another reason to free issue to a contractor is in a typical construction contract a client will pay ‘profit and attendance’ on all items that the contractor procures. By procuring this equipment, the client can manage and minimize this mark up by the contractor.
3 key things to remember are…
#๐ญ – ๐ช๐ต๐ฒ๐ป ๐๐ผ ๐ฝ๐ฟ๐ผ๐ฐ๐๐ฟ๐ฒ
As LLE equipment is invariably coming from Europe, China, US, etc, the timing of procurement and delivery needs to be considered closely.
Invariably LLE takes a long time to build, and then transport to site. For example, we are seeing equipment delivery times to Africa of +40 weeks at the moment due to the Ukraine war and chip shortages…
As this is a process that does not always fit within the construction program, the procurement planning of this equipment is important.
#๐ฎ – ๐๐ผ๐ ๐๐ผ๐ ๐ฝ๐ฟ๐ผ๐ฐ๐๐ฟ๐ฒ
In order to procure LLE early, the client (or the client’s consultant) will engage with suppliers directly.
This requires the client to prepare, issue and manage the LLE supplier contracts alongside the contractor as he builds the data centre.
This is an added complication to the construction process and needs to be managed carefully to ensure the program is met as it is different to a traditional construction process.
#๐ฏ – ๐ช๐ต๐ผ ๐ถ๐ ๐ฟ๐ฒ๐๐ฝ๐ผ๐ป๐๐ถ๐ฏ๐น๐ฒ
In a traditional construction contract, the contractor would procure, install and warrant all items that are built under the contract.
This is a convenient way to do this, as it ensures most responsibility sits with the contractor, so when there is an issue with the installation or operation the client has one person to call.
When a client procures LLE it is important to set out who is responsible, for what, when. To do this effectively there needs to be:
๐นA clear and concise procurement strategy.
๐นA set of well coordinated technical specifications that talk to each other.
๐นA responsibility matrix setting out who is doing what, when, and how.
Putting this in place helps ensure all parties are aware of their responsibilities and minimizes the chance of ‘scope gaps’.
