In a Law 360 article published on June 18, Robert Alfert, co-chair of Nelson Mullins’ Construction practice, provided insight into the increasing legal complexity surrounding the construction of data centers, which are rapidly becoming critical infrastructure for technology, finance, and government sectors. The article underscores that legal advisors are no longer simply contract reviewers, but strategic partners responsible for aligning construction agreements with financing mechanisms, procurement rules, and risk mitigation frameworks.

"A lot of people think that construction and infrastructure is on the back end, but things that are done on the front end on the finance side actually can have a dramatic impact on how you deliver the project from a construction standpoint and the types of terms that need to be in your construction agreement," said Alfert.

Alfert emphasized the need for collaboration across disciplines and a deep understanding of the practical realities on the ground stating, “you don’t want the finance folks negotiating those terms in a vacuum without truly understanding how they work in practice”—because a misstep in the contract stage can cascade into costly delays or litigation once construction begins. He pointed to the growing complexity institutional clients face when financing and procurement requirements clash with project delivery decisions made too early, such as hiring designers or contractors before understanding the competitive constraints tied to grant funding.

“I’ve had to unravel a lot of progress on project when my clients had already picked their architects, engineers, contractors, have already been doing pre-con, and all of a sudden they get these grant instruments that require competitive procurement,” said Alfert.

When it comes to the delivery method of a new facility, Alfert explained it boils down to the client’s needs. He highlighted how delivery models like EPC can simplify execution for less-experienced owners by consolidating responsibility under a single firm but noted that other methods such as Design-Build and Construction Manager At Risk offer different advantages depending on the project’s legal and financial structure. The article walks through these models, offering a broader view of how early-stage legal strategy shapes construction outcomes and risk profiles, including the negotiation of liability limits, incentive structures, force majeure provisions, and tariff-related risks.

Subscribers can read the full article here.