Writing a Power Plant O&M RFP That Gets Comparable Bids

Two O&M bids land on your desk: $1.2 million a year and $1.5 million. The cheaper one wins, until the hot gas path inspection turns out to be "excluded" and consumables show up as a separate invoice every month. The problem wasn't your choice. It was an RFP that let every contractor price a different plant. 

Prismecs runs gas turbine, reciprocating engine and hybrid plants from Mexico to Switzerland to the Bahamas, and we see these tenders from the bidder's side. Here is how to write an O&M RFP that gets you sharper, comparable prices and a contractor you can hold to them. 

How Much Does a Loose O&M RFP Really Cost You? 

Usually far more than the gap between headline prices. In 2024, major US investor-owned utilities spent an average of 2.25 mills per kWh on operation and 2.11 mills per kWh on maintenance at gas turbine and small-scale plants, about $4.36 per MWh combined, according to EIA Electric Power Annual Table 8.4. That category also includes internal combustion, photovoltaic and wind plants, and costs are weighted by next generation, so a gas turbine plant should treat it as a floor, not a target. 

Now run the numbers on your own plant. A $1/MWh gap between two bids is roughly 23% of that average O&M cost. On a 100 MW plant at a 50% capacity factor (438,000 MWh a year), it is about $438,000 a year, or $2.2 million over a five-year term. 

O&M contracts run three to ten years, and when the RFP leaves room for interpretation, bids drift apart in four predictable places: 

1. Scope Boundaries 

One bid covers the full plant; another covers only the generating units. 

2. Staffing Model 

One staffs 24/7 on-site crews; another offers remote monitoring with a day crew. 

3. Major Overhauls 

One includes overhauls and OEM field service; another excludes them or adds a low allowance. 

4. Consumables 

One includes them in the fee; another bills them separately at cost. 

The fix is an RFP every contractor must price the same way. Below is how to build one, with notes from our side of the table on what actually moves the price. 

Which O&M Contract Model Protects Your Budget Best? 

The best model is the one that puts major maintenance risk where you want it. Full-scope O&M gives the most budget certainty; hybrid and performance-based models trade some certainty for a lower price or stronger incentives. Choose one, make every contractor price it, and accept alternatives only as separately priced options. 

From the bidder's side: when an RFP asks for full-scope O&M but leaves major overhauls vague, every contractor prices the worst case. On gas turbine plants, a hybrid structure (a fixed fee for routine work, with outages priced per event) usually gets owners a lower total cost than asking contractors to carry overhaul risk blind. 

What Plant Data Should You Give O&M Bidders? 

Give bidders everything that drives cost: a clear scope boundary, the equipment list, operating profile, maintenance history, CMMS data, permits and existing LTSAs. Every unknown in your RFP becomes a contingency in someone's price, so you end up paying for insurance against guesswork instead of O&M. 

Spell out who does what 

Include a responsibility matrix that splits every system and activity between owner, O&M contractor and OEM: daily operations, routine and major maintenance, balance of plant, the switchyard boundary, BESS, critical spares, environmental reporting and dispatch compliance. Make contractors accept it or mark exceptions line by line. It ends most scope disputes before they start. 

The data room that gets you tighter prices 

Tick these off before the RFP goes out. Each missing item is a line contractors will pad. 

What Should Every O&M Contractor Be Required to Submit? 

At minimum: acceptance of your scope matrix, a named staffing plan with wage assumptions, a maintenance calendar tied to your OEM intervals, an outage plan that works alongside the LTSA, priced consumables and spares terms, safety rates with hours worked, a reporting format and a transition plan. Watch for these red-flag responses, each a sign of where costs will grow: 

Labor is one of the biggest lines in any O&M price, and skilled crews are not cheap. Power plant operators, distributors and dispatchers earned a median of $105,080 a year in May 2025, according to the Bureau of Labor Statistics. BLS also projects about 3,400 openings a year in these roles, almost all to replace workers who retire or leave. Require every bidder to state its wage, overtime and escalation assumptions so you can compare labor cost line by line. 

From the bidder's side: the quickest way to separate a serious contractor from a placeholder bid is the staffing row. Ask for names. A contractor already running similar units can tell you who your plant manager will be. One that is still recruiting can't. 

How Do You Get O&M Bids You Can Compare Line by Line? 

Make every contractor fill in one mandatory pricing template, built on the same operating assumptions, and reject any other format as the main bid. It is the single change that does the most to make O&M prices comparable. 

Lock the assumptions so price gaps mean something 

State them once and make every contractor use them: annual operating hours, starts, capacity factor, outage schedule by year, contract term, currency and escalation indices. Then the cheapest bid is actually the cheapest. 

From the bidder's side: many of the clarification questions contractors send on O&M tenders are about missing assumptions: starts per year, outage timing, which escalation index to use. Every one you answer in the RFP is a contingency removed from every bid. 

Which KPIs Should Your O&M Contractor's Fee Depend On? 

Tie the fee to contractual availability, forced outage rate, starting reliability and safety. Define each one using IEEE Std 762, the standard behind NERC's Generating Availability Data System (GADS), so every bidder measures performance the same way. A fixed fee buys you people on site; KPIs buy you a plant that runs. 

Cap bonuses and penalties at a defined share of the annual fee, and never hold a contractor to a number only dispatch or the grid controls. 

From the bidder's side: contractors who run plants well welcome availability incentives; it is the ones who don't that push back hardest. How a bidder reacts to your KPI structure tells you a lot about how it will run your plant. 

Which Contract Terms Must Your O&M RFP Fix Up Front? 

Put the key commercial terms in the RFP, not in post-award negotiation. If bidders don’t know their liability, termination and exit obligations, they price the uncertainty, and you can’t compare their risk allowances. 

If you are financing the plant, have your owner’s engineer check these terms against lender requirements before the RFP goes out. 

How Should You Score and Compare O&M Proposals? 

Score only normalized bids, against a weighted scorecard you publish in the RFP. Price should be the largest single criterion, but not the only one. Publishing the weights tells contractors what to sharpen and gives your board a decision it can defend. A starting weighting for a gas turbine or hybrid plant: 

Six moves that stop exceptions turning into change orders 

Shortlist contractors with references on your technology and OEM: aeroderivative or heavy-duty gas turbines, combined-cycle, reciprocating engines or BESS. For mixed fleets, a contractor with multi-OEM gas turbine service experience saves you managing several vendors. 

Which O&M Tender Mistakes Raise Your Costs? 

The costliest are the ones covered above: no data room or site visit, major maintenance left undefined, and bidders choosing their own pricing format or KPIs. Two more catch owners late. Ignoring transition risk lets availability slip in the first months under a new operator, so score the transition plan and require cooperation from the incumbent. And picking the lowest price before normalizing exceptions lets those exceptions return as change orders. 

Why Do Owners Shortlist Prismecs for O&M? 

Everything above is how we would want an RFP to land on our desk, because it lets us price your plant instead of a worst-case guess. The experience behind those prices is on the ground. In Mexico, our crews provide full O&M staffing for a 105 MW plant running three TM2500 units as primary power. In Birr, Switzerland, multi-year O&M crews, a CMMS and a spares program keep eight TM2500 dual-fuel units ready as national reserve capacity. In Bimini, Bahamas, we supported commissioning and O&M for 10 MW of gas-fired generation that keeps the island powered around the clock. 

Our teams work across LM6000, LM2500 and TM2500 fleets, source parts independently of any single OEM, and coordinate with your existing LTSA. Send us your RFP and every line of your pricing template comes back filled, exceptions listed separately, with the people who will run your plant named. 

Want to hear it from the owners themselves? Ask for references when you invite us to bid. 

Buying Power Plant O&M Services: Quick Answers 

What is a power plant O&M RFP? 

A power plant O&M RFP is the document an owner issues to invite qualified contractors to bid on operating and maintaining a generating facility, such as a gas turbine, combined-cycle, reciprocating engine, solar, wind or battery storage plant. It sets the scope, plant data, pricing format, KPIs and evaluation criteria every bidder must follow. 

How do you compare O&M bids fairly? 

Put every bid on one pricing template and one set of assumptions, list and price each bidder's exceptions, adjust all bids to a common basis, then score them on a published weighted scorecard. Comparing headline prices before normalization rewards the bid with the most exclusions. 

Should I outsource power plant O&M? 

Outsource when you lack an in-house operating team, run a single plant or a remote site, or need guaranteed availability for a PPA or lender. A specialist contractor brings trained crews, a CMMS and spares management from day one, and a KPI-linked contract puts performance risk on them. 

What should a power plant O&M RFP include? 

A scope of work with a responsibility matrix, a plant data package, staffing requirements, maintenance and outage responsibilities, spare parts terms, HSE requirements, KPIs and incentives, one mandatory pricing template, contract terms and a published evaluation scorecard. 

How much does power plant O&M cost? 

It depends heavily on technology, size and duty cycle. As a benchmark, major US investor-owned utilities averaged about $4.36 per MWh in combined operation and maintenance cost at gas turbine and small-scale plants in 2024, per EIA. Peaking plants with few running hours cost far more per MWh. 

How long should an O&M contract term be? 

Most run three to ten years, often with renewal options. Longer terms can lower annual pricing because mobilization and training costs are spread out, but they need strong performance and termination provisions. 

What is the difference between an O&M contract and an LTSA? 

An O&M contract covers daily operations and routine maintenance. A long-term service agreement (LTSA) is usually signed with the OEM and covers major maintenance, parts and inspections for specific equipment such as gas turbines. The RFP should state how the two interface. 

How many bidders should receive an O&M RFP? 

Three to six prequalified bidders is common practice. Prequalify on same-technology experience, safety and financial strength so evaluation time goes to credible proposals. 

Should O&M fees be fixed or performance-based? 

Most owners use a fixed base fee with a capped KPI incentive on top. That keeps budgets predictable while rewarding availability and reliability. 

Which KPIs are most common in power plant O&M contracts? 

Contractual availability, forced outage rate, starting reliability, heat rate, safety performance, environmental compliance and preventive maintenance completion. 

Ready to Lower Your O&M Costs? 

A clear RFP gets you bids you can actually compare. The right O&M contractor keeps your plant available and your costs predictable for years. 

Prismecs operates and maintains gas turbine, reciprocating engine and hybrid power plants. Send us your tender and we will price it on your template, line by line, with the team who will run your plant named in the proposal. Still drafting the RFP? We can help you get the scope, pricing sheet and KPIs right first. 

Talk to our power expert today at 1 (888) 774 7632.