Issue Date: 
Tuesday, September 20, 2016

10 Principles When Pricing Your Tender

We are often asked how to work out a tender price? But there is no straight answer because every tender is different. The fact is that a tender for the supply of furniture will have a different pricing structure to that of the supply of food for a government function. So to provide individual pricing techniques would be very difficult.

In general, there are ten points that must be considered when calculating price. These are:

  • Price is king – ensure that you price your product or service as low as possible in order to stand a chance of winning a tender.
  • Be precise; when the product supplied is R101-26 then state it in the tender response as R101-26 and not as R101-00 or even R102-00. Small differences like these can result in large amounts that can be lost, depending on the size of the tender.
  • Ensure that all the costs of delivering the product is taken into consideration; double check your pricing – omitting something small can come back and bite you later on.
  • Confirm prices of goods with your suppliers – prices can change very quickly due to increases in fuel prices or exchange rate fluctuations.
  • Always remember to add Value Added Tax (VAT) at 14% to your price especially when it relates to Government tenders. Most tenders state that the price must include VAT.
  • Ensure that all other applicable taxes are included in the tender price.
  • The most important piece of advice on Pricing: never bid too low or too high;
    • Bid Evaluation Committees are well informed and they will know if a bid is too low or too high;
    • Bidding too low or too high might lead to a tender response being disqualified or marked as non-responsive;
  • Pricing can be influenced by law as well – there are several industries in South Africa, such as the cleaning industry, which has minimum wages payable to employees;
  • A suggestion is that if your usual mark-up is 25% then tender perhaps at 18% to 20%. Remember that you are going to save on direct costs as well as on other expenses such as advertising, telephone costs and much more. Use these savings to lower your price.
  • Remember that in Government tenders you are going to be scored on your price and currently price counts for 80 out of 100 points for tenders less than R1 million and 90 out of 100 points for tenders with a value of more than R1 million. The bidder with the lowest price receives the most points.

To learn more about this and many other tender conditions please attend one of our How-to-Tender workshops. Tender Workshop dates are published on our website at www.how2tender.com.

Learn to earn

Title Closing Date Tender No.
Appointment of Service Providers for Emergency Accomodation as and when needed until 30 June 2019. 2018-07-25 11:00 6/19
GIZ SAGEN wishes to appoint a consultant to develop an automated Statistical Measurement and Verification Tool (MVT), to 'electronify' the South African National Accreditation System (SANAS) Technical Guide (TG) 50-02 document and with specific reference to the South African National Standard for Measurement and Verification, i.e. SANS 50010:2018, (Edition 2). 2018-07-20 12:00 #83294869
Supply Front hub seal 2018-07-19 14:00 WE11900212
Supply Alternator belt 2018-07-19 14:00 WE11900211
Supply 3 each x beta bait stations boxes 2018-07-19 14:00 GC11900021
Supply Durable sentinel mat with city logo 2018-07-23 12:00 GL11900027
Tenders are invited for the Hiring of 1.8 Ton Diesel Forklift Truck for a period of one month. 2018-07-24 11:00 CSQ07181343
Tenders are invited for the Hiring of 1.8 Ton Diesel Forklift Truck for a period of one month. 2018-07-24 11:00 CSQ07181343
Bookbinding of agendas. 2018-07-19 12:00 SD119O0035
Supply A5 leather folders 2018-07-23 12:00 GL11900032
Provision of Internet Services 2018-08-17 15:00 ADB/RFP/RDGS/2018/0090
Appointment of an Experienced Service Provider to Conduct Locality Analysis for the Tshwane Clothing and Textile Hub Project 2018-07-31 11:00 TEDA/PPM 01/07/18
Shuttle service (hire of 14 seater) 2018-07-24 09:00 WJ11900030
Supply and delivery of voice recorder. 2018-07-20 11:00 GK11900023
Request for proposals from service providers to deliver international executives development programme (NQF level 8) aimed at senior managers and executives in the transport sector (all transport sub-sectors) 2018-08-03 11:00 TETA18/CS/0003/IEDP
Appointment of a service provider to lease commercial office accommodation to SASSETA for a period until 31st March 2020 with an option to re-new 2018-08-13 11:00 RFP/SASSETA/1718006/01
Supply Clear carpet protectors Subcouncil 18, Lotus River. 2018-07-20 12:00 GL11900031
Supply unit packaging carbon asphalt 2018-07-20 14:00 GE11900144
Supply Clean filling sand 2018-07-25 14:00 GE11900143
Macro-Economic Impact Assessment of the Contribution of the EPWP on the South African Economy. 2018-08-06 12:00 IDTDPW29NATN

Pages

Tender adjudication process

The SBD/WCBD6.1 document must form part of all bids invited.  It contains general information and serves as a claim form for preference points for Broad -Based Black Economic Empowerment (B -BBEE) Status Level of Contribution, and explains how tenders or bids are decided.

The document says:

  • The bidder obtaining the highest number of points will be awarded the contract.
  • Preference points shall be calculated after prices have been brought to a comparative basis.
  • Points scored will be rounded off to two decimal places... Read More
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