A water-cooled chiller over 1,000 tons quoted at 50 to 70 weeks in May 2026. The developer who lets the mechanical subcontractor buy it after the guaranteed maximum price pays about 15% more for a machine that arrives 20 weeks late. The route the hyperscalers use, owner-furnished and contractor-installed, puts the chiller purchase order on the owner’s desk 78 weeks before mechanical completion, strips the two markup layers that public construction contracts print in black and white, and hands the owner the deposit, the storage bill, the warranty clock and the rigging risk in exchange. The Datacenter MEP Cost Table prices both routes for a 20 MW liquid-cooled hall below: what they cost, what public contracts say the markup is, what the owner carries instead, the sales-tax angle in Virginia, Texas and Florida, the warranty and single-point-of-responsibility trade, capacity reservations as the hyperscaler version of OFCI, the calendar, and, behind the wall, the nine clauses that make it work.
Source: Open Factory Datacenter MEP Cost Table (compiled from Turner & Townsend 2025, Caltrans 2018 Standard Specifications, FRED, City of Ocala and Riverside contracts; as of June 2026)
The long-lead cooling package for a 20 MW hall is $25.9 million at OEM price in both bars; through the mechanical subcontract it becomes $32.8 million after a 15% subcontractor markup ($3.9 million) and a 10% general contractor fee ($3.0 million), while owner-furnished it becomes $27.9 million after $0.4 million of deposit carry, $0.4 million of one month’s vendor storage and $1.2 million of owner staff and installer productivity, a saving of $4.9 million or 14.9% of the contractor-furnished price. Every input is in data/assumptions.csv with its source; the ones that are ours are labelled ours.
Two Routes to the Same Machine
Design-build and CM-at-risk buy the chiller after the price is fixed; OFCI buys it before the design is finished, and the 50 to 70 week lead time is what makes the difference worth $4.9 million. Under the contractor-furnished route the GMP is set when drawings are 60 to 90% complete, the mechanical subcontract is bought out after that, and the sub places the chiller order. Under OFCI the owner’s engineer freezes the basis of design (tonnage, W-class, redundancy, refrigerant), the owner issues the RFQ and the PO in its own name, carries the deposit, and assigns delivery, rigging and installation to the mechanical contractor by a coordination clause. The Lead-Time Monitor carries Origin Partners’ Q2 2026 ranges for the three cooling classes: 40 to 60 weeks for air-cooled chillers over 500 tons, 50 to 70 for water-cooled over 1,000 tons, 30 to 50 for CDUs.
Public owners have bought this way for decades. Riverside Public Utilities bought a 15 kV switchgear lineup from Avail Switchgear Systems for $2,561,551.88 in June 2024 on its own purchase order, with delivery “scheduled for the first quarter of 2026”, a 10% contingency, and $82,293 of the utility’s own project management and engineering charged to the work order; construction, factory testing and commissioning were a separate contract, which is the pattern Reading a Switchgear Quote took apart line by line. The City of Ocala bought three power transformers for $5,726,568 in March 2024 with 20% down, 30% at approved drawings and 40% at shipment, and a clause under which title passes to the city the day a unit goes into the vendor’s storage. The federal government wrote the general rule into FAR 45.102: “Contractors are ordinarily required to furnish all property necessary to perform Government contracts”, and agencies may furnish property only when “the overall benefit to the acquisition significantly outweighs the increased cost of administration”. GSA and the Corps of Engineers buy under that clause; a 70-week chiller on a 52-week construction schedule is the textbook exception.
What the Markup Is, From Public Contracts
Negotiated subcontract markups are private, but the markups that public owners print as ceilings for extra work run 15 to 21% on materials and equipment, 7 to 12% on subcontracted work, and 0% on owner-furnished property. Caltrans’ 2018 Standard Specifications pay force-account work at cost plus 35% on labor, 15% on materials and 15% on equipment rental, with “an additional 10 percent markup” when a subcontractor performs the work. WSDOT’s 2024 book pays 29% on labor plus 2% for sick leave, 21% on materials and 21% on equipment, and marks up subcontractor work at 12% up to $50,000, 10% to $200,000 and 7% above that. Turner & Townsend’s 2025 cost index puts GC/GRs and GC fees at 10% of a US data center’s construction cost, air-cooled or liquid-cooled.
Source: Caltrans Standard Specifications 2018; WSDOT Standard Specifications M 41-10, 2024; Turner & Townsend, Data Centre Construction Cost Index 2025; FAR Part 45; iRecruit, August 2026
Twelve disclosed rates run from 35% (Caltrans labor) to 0% (FAR 52.245-1, where a contractor that receives Government-furnished property gets “an equitable adjustment” for late delivery and no markup on the property itself); the two materials rates are 15% and 21%, and the three subcontract-layer rates are 7%, 10% and 12%. The trade’s rule of thumb, that OFCI saves about 15% of equipment cost at a cost of up to 6% in installer productivity on unfamiliar gear, comes from a recruiter’s compilation of practitioner estimates and is used here only because it lands where the public schedules land. The MEP Cost Table uses Caltrans’ 15% and 10% as the base case and WSDOT’s 21% as the high case; the negotiated buyout markup on a $25.9 million package is the number no one publishes, and the Equipment Price Benchmark exists to collect it.
The package itself is the mechanical share of a liquid-cooled hall at Turner & Townsend’s $9.8 per watt for Phoenix and Columbus, 33% of $196 million, or $64.7 million, of which we assume 40% is owner-furnishable long-lead equipment: five 1,600-ton machines (four plus a standby), towers or dry coolers, 18 CDUs at 1.3 MW, pumps, plate exchangers and glycol. The chiller line alone at 8,000 installed tons and $1,000 per ton is $8.0 million, inside the $1,000 to $2,100 per ton equipment range a retail guide printed in December 2025; that is a guide range, not a quote distribution, and the Public Bid-Tab Price Book has no chiller award at datacenter scale yet.
The Owner’s Side of the Ledger
Owning the machine early costs $0.52 million a month while it sits in storage, and the deposit interest that everyone worries about is the smallest line. The OFCI PO goes out at 78 weeks before mechanical completion; a mechanical sub buying after the GMP would place it around week 40. A 30% deposit, the top of the 10 to 30% range manufacturers hold slots for, is $7.8 million out 38 weeks early, and at the 6.75% prime rate on June 26, 2026 that is $383,000 of interest. Storage is the expensive line: Cummins’ terms in a February 2025 Ocala contract charge “a minimum storage fee in the amount of one and one-half percent (1.5%) per month of the total quoted amount” once the customer fails to take delivery within 30 days, and Eaton’s terms make the buyer “reimburse Seller for all costs of storage and handling incurred by Seller after the date that Seller is prepared to make shipment”. On $25.9 million that is $388,000 a month, plus $131,000 of interest on the 90% already paid.
Source: Open Factory Datacenter MEP Cost Table
Carrying cost starts at $0.4 million (the deposit carry) and climbs $0.52 million a month, crossing the $2.6 million a 10% GC fee is worth at month 5 and the $6.9 million the two Caltrans layers are worth at month 13. OFCI pays for itself as long as the machine does not live in the vendor’s yard, so a delivery-date clause with a free deferral window matters more than the deposit percentage. The other two owner costs are staff and installer friction: Riverside charged 3.2% of the switchgear price to its own engineering and project management, $832,000 on $25.9 million, and the 6% productivity hit on installation labor of a quarter of equipment value is $388,000.
The Sales Tax Angle
Three states exempt data center chillers from sales tax, and each one attaches the exemption to the purchaser of record, which is the owner under OFCI and the contractor under design-build. Virginia’s 58.1-609.3(18) exempts “computer equipment or enabling software … including chillers and backup generators” for a data center that makes “a new capital investment … of at least $150 million” and creates 50 jobs at one and a half times the prevailing wage, through June 30, 2035, and “applies to the data center operator and the tenants of the data center if they collectively meet the requirements”. Texas exempts “electricity; an electrical system; a cooling system; an emergency generator” and “a mechanical, electrical or plumbing system that is necessary to operate any tangible personal property” for a qualifying data center of 100,000 square feet with $200 million invested and 20 jobs, for 10 years at $200 to $249 million and 15 years above $250 million; the buyer presents Form 01-929 carrying both the facility’s and its own registration number. Florida’s 212.08(5)(r) exempts property used “to construct, outfit, operate, support, power, cool, dehumidify, secure, or protect a data center” once the owners and tenants have invested $150 million and the site carries 100 MW of critical IT load.
| State | Instrument | Threshold | Exempt (quoted) | Who claims | Period |
|---|---|---|---|---|---|
| Virginia | Va. Code 58.1-609.3(18) | $150M investment, 50 jobs at 1.5x prevailing wage ($70M and 10 jobs in distressed localities) | “computer equipment and enabling software … including chillers and backup generators” | Operator and tenants, collectively | Jul 1, 2010 to Jun 30, 2035 |
| Texas | Tax Code 151.359; Form 01-929 | 100,000 sq ft, $200M over 5 years, 20 jobs; large project 250,000 sq ft, $500M, 40 jobs | “an electrical system; a cooling system; an emergency generator; … a mechanical, electrical or plumbing system” | Registered owner, operator or occupant with its certificate | 10 years ($200M to $249M), 15 years ($250M+), 20 years large project |
| Florida (private) | Fla. Stat. 212.08(5)(r) | $150M cumulative investment, 100 MW critical IT load, 1 MW per tenant, within 5 years | “to construct, outfit, operate, support, power, cool, dehumidify, secure, or protect a data center” | Certificateholder (owner or tenant) | No sunset in the text |
| Florida (public works) | Fla. Stat. 212.08(6)(b); Rule 12A-1.094; DOR GT-800067 | Entity buys direct: its PO, its invoice, its payment, title on delivery, risk of loss at purchase | Materials and supplies that become part of a public facility | Governmental entity with a Certificate of Entitlement; contractor purchases taxable | Current |
Three states exempt data center cooling gear, and each ties the exemption to the purchaser of record. Source: Va. Code 58.1-609.3; Texas Comptroller; Fla. Stat. 212.08; Florida DOR GT-800067. Data: 05-sales-tax-by-state.csv
Florida’s public-works rule is the cleanest statement of why the purchaser matters. Statute 212.08(6)(b) says the government exemption “does not include sales of tangible personal property made to contractors employed directly to or as agents of any such government”, and the Department of Revenue’s GT-800067 spells out the owner-direct-purchase test: the entity issues its own purchase order and exemption certificate, pays the vendor directly, is invoiced directly, “must take title to the materials upon delivery to the jobsite” and “must assume the risk of loss of the materials at the time of purchase”. That is OFCI defined by a tax collector, and at Florida’s 6% state rate it is worth $1.55 million on a $25.9 million package before county surtax. A developer holding a Texas or Virginia certificate should read the same test into its design-build contract: the exemption is the registrant’s, and a subcontractor’s PO in the subcontractor’s name is a form the state may or may not look through.
Warranty, Rigging and the Single Throat
Every OEM warranty we opened runs from start-up or from shipment, whichever comes first, so a chiller bought 78 weeks out and stored for a season can arrive at commissioning with half its warranty gone. Carrier’s commercial terms cover defects “within one (1) year from the date of initial operation or eighteen (18) months from date of shipment, whichever is earlier”. Eaton’s switchgear terms are the shorter of 12 months from installation or 18 from shipment. Hitachi Energy quoted Ocala 18 months from delivery or 12 from commissioning, whichever first. Cummins is the outlier a buyer should copy: its “3-year warranty begins at the successful completion of startup and testing in lieu of acceptance or substantial completion”. Under design-build the shipment clock is the sub’s problem inside a one-year building warranty; under OFCI it is the owner’s, and Ocala’s transformer contract adds the trap that the warranty is void for “storage … not in accordance with Contractor’s specifications”.
Rigging is the second place the risk moves. Cummins’ terms say “offloading, handling, and placement of Equipment and crane services are the responsibility of Customer”; PTI Transformers’ proposal to Ocala allows two free hours for offloading and then charges CAD 150 an hour, CAD 250 a day per tank in trailer detention and CAD 1,300 a day in layover. A 1,600-ton centrifugal outside a hall whose pad is not cured is those numbers times the trucks. The single-point-of-responsibility argument for design-build is real and it is this: when an OFCI item “arrives late, damaged, or incomplete, the responsibility lies with the owner, not the contractor”, as one contractor put it in the iRecruit compilation, and the federal clause says the same thing in regulatory prose, the installer gets “an equitable adjustment” when Government-furnished property misses its date. Integration risk follows the same line. The mechanical contractor still owns piping, flush, glycol fill, controls integration and commissioning, and a coordination clause that names the OEM start-up prerequisites (Cummins requires “a signed site check sheet confirming readiness” and two weeks’ notice) is what keeps two throats from becoming none.
Capacity Reservations: OFCI on the Factory
The hyperscaler version of OFCI skips the machine and reserves the factory: Modine took a $165 million deposit in March 2026 against more than $4 billion of cooling products for 2027 to 2029, a 4.1% deposit on three years of a plant’s output. Modine’s 10-K describes “a long-term capacity agreement with one of its strategic data center customers” and “a $165.0 million up-front deposit from the customer to support the Company’s investments necessary to meet the planned sales volume”, in the same filing that admits “demand for certain key components is currently outpacing supplier capacity”. The $60 Million Deposit covered the gas-turbine version in May: GE Vernova ended Q1 2026 with 44 GW of firm backlog and 56 GW of slot reservation agreements, signed 19 GW of new reservations in the quarter, and tells shareholders it makes “capacity expansion decisions and supply commitments based on demand forecasts, orders, slot reservation agreements, and deposits”.
| Buyer or seller | Date | Terms | Source |
|---|---|---|---|
| Modine, one strategic data center customer | Mar 2026 | $165.0M up-front deposit on more than $4B of cooling products, CY2027 to 2029 (4.1% floor) | Modine 10-K FY2026, May 27, 2026 |
| GE Vernova gas turbines | Q1 2026 | 44 GW firm backlog plus 56 GW slot reservation agreements; 19 GW of SRAs signed in the quarter | GE Vernova 8-K, Apr 22, 2026 |
| Vertiv, deferred revenue (current) | Mar 31, 2026 | $2,461.8M vs $1,095.1M a year earlier (+125%); 0.93x quarterly sales | SEC XBRL; Vertiv 10-Q |
| Munters, US colocation customer | Dec 31, 2025 | SEK 2.1B of CRAHs, CDUs and chillers; deliveries Q4 2026 through Q1 2028 | Munters press release |
| Switchgear, transformer and genset OEMs | Jun 2026 | Slots held for 10 to 30% of equipment cost; reservation compresses apparent lead time 8 to 16 weeks | Terrapin Construction Group |
| Utility transformer buyer (City of Ocala) | Mar 2024 | 20% with order, 30% at approved drawings, 40% at shipment; 30% rescheduling fee; title passes into storage | Ocala agreement ELE/240044 |
Capacity reservations are OFCI with the deposit on the factory instead of the machine. Source: Open Factory Lead-Time Monitor (compiled from SEC filings, Munters, Terrapin, City of Ocala; as of June 2026). Data: 06-capacity-reservations.csv
The cooling OEMs’ balance sheets show who is paying early. Vertiv’s current deferred revenue, the customer cash it holds ahead of shipment, was $2,461.8 million on March 31, 2026 against $1,095.1 million a year earlier, up 125%, and equal to 0.93 quarters of sales; its 10-K says the $15.0 billion backlog “is expected to be shipped within the next 12 to 18 months”. Munters booked a SEK 2.1 billion order for CRAHs, CDUs and chillers from a US colocation company on December 31, 2025 with deliveries “scheduled to begin in Q4 2026 and continue through Q1 2028”; Chillers Are the 60-Week Problem laid out the five Munters windows and the Trane, Carrier and JCI backlogs behind them in March, and the Book-to-Bill League Table tracks the quarterly ratios. A colocation developer cannot write a $165 million check for a factory. It can write the three things the check buys: a named slot, an indexed price, and a delivery window it controls, and the paid section says how.
The Calendar
Counting back from mechanical completion with the Monitor’s published ranges, the chiller RFQ goes out 66 to 86 weeks ahead, the PO and deposit at 58 to 78, and the CDU PO at 36 to 56, all of them before a GMP signed at week 40. The Lead-Time-Adjusted Schedule builds the calendar from the published range plus a submittal, FAT and freight buffer of 8 weeks for chillers and 6 for CDUs, the same buffers the sibling article used for its 78-week headline; the milestone windows inside the PO come from the public specifications above: drawing submittals 4 to 6 weeks after order in Hitachi Energy’s quote, a test plan four weeks before FAT and FAT as “a hold point” in Mount Pleasant’s transformer spec, and two weeks for the engineer to review test results before shipping in BrightRidge’s.
Source: Open Factory Lead-Time-Adjusted Schedule (inputs: Origin Partners Q2 2026; Hitachi Energy, MPMU and BrightRidge specifications; buffers are Open Factory assumptions)
Nine windows: RFQ 66 to 86 weeks out, PO 58 to 78, approval drawings back 50 to 74, CDU PO 36 to 56, CDU drawings 30 to 52, FAT 8 to 14, ship 6 to 8, chillers set 4 to 6, CDUs set 2 to 6, against a GMP at roughly week 40 that a design-builder cannot honestly sign earlier because the drawings are not done. The three chiller windows and both CDU windows open before the contractor who would buy the equipment exists as a party to the job. The developer can still have the design-builder’s single throat for everything after week 40, and not for the chiller; the Cooling Roadmap does not show the 50 to 70 week range closing before 2028.
What to Do Monday
First, run the hall through the Lead-Time-Adjusted Schedule with the Monitor’s 50 to 70 weeks for water-cooled chillers and 30 to 50 for CDUs, and if the chiller RFQ is not dated before the land closes, the energization month is wrong. Second, split the mechanical scope in the CM-at-risk or design-build agreement now, before the GMP: chillers, towers or dry coolers, CDUs and the pump-and-exchanger kit as owner-furnished, with the contractor’s fee on that equipment written at the FAR’s 0% or a stated handling percentage, not left to the buyout. Third, write the RFQ with the capital-equipment template: slot week on the face of the PO, deposit no higher than the 20% Ocala paid, a PPI index clause on the last milestone instead of a firm price the OEM will not give, and liquidated damages at 0.5% a week against the slot. Fourth, put the deferral window in: 30 days free, then a stated dollar-per-week storage rate under the OEM’s own storage instructions, title and the owner’s builder’s-risk attaching on the storage date, and a warranty that starts at commissioning. Fifth, register for the state exemption before the PO, not after, and run any imported machine through the Tariff Exposure Calculator and the quote through Quote Check before the deposit leaves.
Behind the paywall: the nine-clause set for the owner’s chiller and CDU purchase order and the mechanical subcontract, each with the public contract it is copied from, and the five terms a 20 MW developer can lift from the hyperscaler capacity-reservation playbook, starting with the 4.1% deposit Modine’s customer paid for three years of a factory, all built on the Datacenter MEP Cost Table.