Edgewood Energy uses multiple service providers to reduce the cost of engine repairs
The standard approach for handling major gas-turbine repairs is to solicit bids from multiple vendors and select the one offering best value. NAES Corp Area Manager Kenneth Ford and O&M Manager John Lawton wanted to improve upon this process for an upcoming overhaul at the two-unit Edgewood Energy LLC peaking facility, one of several plants in J-Power USA Development Co’s Long Island (NY) portfolio. Their goal: Deliver greater value without negatively impacting work quality and outage duration.
First step was to explore the feasibility of using multiple service providers, each having one or more portions of the larger repair work scope. Some service providers declined to participate in this program, which required bidders to modify their previous proposals for the entire overhaul into quotations for specific aspects of the repair scope.
Vendors were asked to bid on the following work packages:
- Depot-level overhaul of the low-pressure turbine.
- New second-stage nozzle assembly for the high-pressure turbine.
- Provide a replacement combustor and fuel nozzles, and perform all field service work.
Disaggregating the repairs into work packages with three different service providers produced a $350,000 saving compared to the lowest bid for the entire project. There was no significant change in outage duration using three vendors versus one.
However, plant staff put in extra man-hours, primarily for due diligence—including:
- Repeated rounds of quotes, follow-up discussions, and clarifications necessary to clearly present the options and recommendations to site ownership.
- Agreement on terms and conditions with the three service providers.
- Extended discussions with site ownership for evaluating the risk versus reward of selecting three service providers instead of one.
Contractor oversight also added to staff man-hours because of the three entities involved.
With the multiple-vendor approach highly successful, the owner will consider it for upcoming work at its other Long Island facilities. Future bid specifications likely will ask service providers to quote both the entire work scope and specific repair packages.