Managing Risk in the Age of Digital Infrastructure:
How Western Pennsylvania’s Union Builders Can Lead in Data Center Delivery
Data centers are one of the fastest‑growing segments of large‑scale construction, driven by cloud computing, artificial intelligence, life sciences, and always‑on digital services. These projects are larger, more complex, and more tightly scheduled than traditional commercial or industrial builds.
For contractors in Western Pennsylvania, including members of the Master Builders’ Association, data centers are now part of regional site searches, development pipelines, and bid lists. To win and deliver this work profitably, union contractors and skilled trades must understand how these projects differ, especially from a risk perspective.
Data centers present a strong opportunity for union labor but a risk profile unlike a hospital, office tower, or manufacturing plant. Success requires a disciplined approach to risk across the fully project lifecycle, from site selection and concept design through construction, commissioning, and early operations. Risk cannot be an insurance checkbox at the end; it has to be built into how projects are pursued, planned, priced, executed, and handed over.
Why Western Pennsylvania Is Emerging
Western Pennsylvania is drawing attention for data center development because it combines grid strength with established industrial sites, robust transportation networks, and a deep pool of skilled union labor, making it an attractive alternative to traditional, capacity‑constrained data center hubs.
The Pittsburgh area sits within PJM Interconnection (originally Pennsylvania, New Jersey, Maryland), a regional transmission organization (RTO) that operates the high‑voltage grid and wholesale power market across much of the Mid‑Atlantic and Midwest. For energy‑intensive facilities that depend on continuous, stable power, access to a large, diversified grid with multiple generation sources and transmission paths is essential.
Local contractors already have experience in complex industrial, healthcare, and infrastructure work, including high‑reliability power and challenging phasing. These capabilities translate directly into data center delivery when paired with a clear view of risk.
The Power Constraint Challenge
PJM interconnection and local utilities have identified growing strain on transmission and distribution networks. Interconnection queues are longer, and timelines less predictable. For contractors and owners, that can mean:
- Power availability determining whether a project can proceed
- Delays in energization disrupting critical‑path activities
- Temporary or on‑site power becoming a significant cost item
Power is not a late‑stage “owner issue.” It is a central project risk that belongs in pursuit conversations, preconstruction planning, and contract negotiations. Contractors that understand power constraints and help owners build realistic schedules and contingencies will stand out.
That includes knowing how long interconnection approvals may take, what temporary power is realistic for testing, and how phased energization affects schedule and risk transfer. Clear power‑related assumptions in proposals help prevent disputes if utility timelines shift.
Why Data Centers Are Different
From the outside, a data center may look like any other large, windowless building. From a risk standpoint, it behaves very differently. Data center projects are:
- Capital intensive
- Schedule driven, with go‑live dates tied to contracts and capacity commitments
- Downtime sensitive, with almost no tolerance for failure once operational
Delays during structure or enclosure can quickly cascade once they affect major equipment deliveries, system integration, and commissioning windows. When substantial completion slips, financial and reputational consequences for owners and tenants can be significant.
Contractors need clear playbooks for escalating issues, documenting impacts, and communicating with partners when critical milestones are at risk.
Complexity Under the Skin
Data center projects involve:
- Dense, highly coordinated mechanical, electrical, and plumbing (MEP) and low‑voltage systems
- Long‑lead, critical equipment such as switchgear, generators, uninterruptable power supply (UPS), chillers, transformers, and batteries
- Tight integration between building systems and IT infrastructure
- Multi‑stage commissioning and systems testing
Commissioning is not a quick punch‑list exercise. It requires dedicated planning, staffing, and risk management, often including factory and site acceptance testing, integrated systems testing, and staged load testing.
Technology risk appears earlier than on most projects. Building management systems, controls, remote monitoring, and digital commissioning tools may be active well before substantial completion. Failures or compromises can damage equipment, delay testing, and disrupt turnover.
For contractors, this raises coordination demands and exposure to schedule‑related penalties. It also heightens the need for clearly defined roles, especially around software configuration, network access, and responsibility for control system security during construction.
Western Pennsylvania’s Regional Risk Factors
Western Pennsylvania brings environmental, geotechnical, and legacy site conditions that can materially affect data center delivery. Recognizing these early, and pricing and scheduling for them, is critical.
Flooding and Water Management
Rivers, steep terrain, and aging stormwater systems make flooding a recurring regional risk. Even elevated sites may be exposed through access roads, underground utilities, or stormwater backup.
For data centers with mission‑critical electrical infrastructure, on‑site water management is a primary concern. Misjudging flood risk can lead to equipment damage, schedule slippage, and questions about long‑term resilience and insurability.
Key strategies include enhanced grading, raised equipment yards, robust drainage, and coordination with civil designers and local authorities.
Winter Conditions and Severe Weather
Cold weather and freeze‑thaw cycles affect concrete placement, heavy‑lift operations, enclosure milestones, and MEP testing. Wind, hail, and lightning can damage stored or partially installed equipment and disrupt power or communications during commissioning. Storm‑driven outages can interrupt testing and force re‑testing.
Allowances for weather contingency days, winter construction methods, and protected storage for critical equipment should be built into schedules and budgets.
Legacy Industrial and Brownfield Sites
Many attractive sites are former industrial properties with legacy utilities, unknown subsurface conditions, environmental remediation needs, and complex permitting. Addressed early, these risks can be managed and sometimes turned into advantages. Overlooked, they drive cost overruns and claims.
Using Risk Analysis to Improve Outcomes
Risk analysis is most effective when it informs decisions, not just documentation.
Engineering‑based modeling and scenario analysis can help quantify:
- Potential loss from fire, flood, or severe weather
- Delay in startup tied to key milestones such as switchgear delivery or energization
- Site‑specific hazard exposure and resilience options
- Power and interconnection single points of failure
For contractors, this supports clearer bid/no‑bid and margin decisions, stronger preconstruction planning, realistic schedules, and risk‑aware pricing. It also creates a shared understanding among owners, lenders, and insurers, helping align contingency, contracts, and insurance structure.
The Value of Risk Engineering
Many of the most significant risks in data center projects occur during construction, commissioning, and early operations phases where contractors carry substantial responsibility.
Bringing risk engineering into the process early, ideally before final pricing, can reduce exposures and improve constructability. Focus areas include:
- Fire protection in high‑density electrical and battery spaces
- System separation and redundancy aligned with uptime goals
- Commissioning and testing plans, including energization and integration sequences
- Temporary works, logistics, and cold‑weather strategies
Identifying issues on paper rather than in the field leads to better coordination, fewer late‑stage surprises, and stronger alignment with insurers and owners.
Aligning Insurance with the Project Lifecycle
Traditional insurance structures draw sharp lines between construction, commissioning, and operations. Data center risk does not.
Risk is often concentrated in the transition phase when permanent power is energized, critical systems are tested and integrated, and IT equipment is installed. Coverage gaps are most likely at these points, especially between builder’s risk, delay in startup, and operational property and business interruption policies.
A lifecycle approach aligns coverage across all phases, from site mobilization through early operations. Depending on the project, this may include builder’s risk, delay in startup, operational property and business interruption, cyber coverage for control systems, project cargo, and wrap‑up liability programs.
Cyber‑Physical Risk: Where Digital and Physical Meet
As projects rely more on digital systems, cyber‑physical risk has become a critical exposure: situations where a digital issue leads to physical damage, delay, or safety concerns, such as:
- Compromised building management or control systems causing overheating or shutdown
- Cyber incidents that disrupt commissioning software or remote testing
- Configuration errors in control systems that damage equipment during testing
Managing this risk requires coordination between construction, commissioning, and technology teams; clear responsibility for control system security during construction; and contract and insurance language that recognize cyber‑physical scenarios, not just traditional IT breaches.
What This Means for Union Contractors
Western Pennsylvania’s union contractors already bring many of the core skills needed for data center work:
- Heavy civil and foundations in challenging terrain
- Structural steel and large‑scale enclosure
- Complex MEP systems and power distribution
- Industrial‑scale commissioning and startup
What is different is the intensity of risk and the expectations around schedule, uptime, and performance.
A disciplined approach to risk can help contractors price work with greater confidence, build schedules that reflect real regional and technical conditions, structure insurance and subcontractor programs effectively, and reduce disputes. Contractors that treat risk as a core part of project delivery, not a back‑office function, will be better positioned to compete and sustain this work over the long term.
Key Takeaways for MBA Members
- Power availability and interconnection timelines are critical project risks.
- Data centers are driven by MEP systems, controls, and commissioning.
- Western Pennsylvania’s regional risks must be addressed early in planning.
- Risk analysis should inform go/no‑go decisions, pricing, and scheduling.
- Early involvement of risk engineering improves constructability and outcomes.
- Insurance should align with the full project lifecycle.
- Cyber‑physical risk is increasing and must be managed deliberately.
Contractors who succeed in this space will not be those who simply adapt to data center work, but those who approach it with intention, engaging earlier, asking tougher questions, and being explicit about where risk sits before work begins. Western Pennsylvania has the workforce and experience to compete in this market. The opportunity now is to lead by setting a higher standard for how digital infrastructure projects are planned, built, and handed over.
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