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.
Tonometer ICARE x 1 (specification attached) 2017-11-01 11:00 192/ 10/ 17
The appointment of a service provider to conduct elephant research in support of the Elephant Research Strategy for the Branch: Biodiversity Conservation for a period of three years 2017-11-10 11:00 E 1422
The appointment of the service provider to assist DEA with construction/ erection of game fence at Awelani Community Conservation Area 2017-11-10 11:00 E 1421
Department Of COGHSTA invites contractors for the establishment of contractor database for the construction of BNG Human Settlements for a period of three (3) years i.e. 36 months. 2017-11-17 11:00 NC/ 11/ 2017
Supply and deliver Industrial gas Stoves - 6 plate burner with oven 2017-11-03 11:00 ZNQ: 708/ 17- 18
Supply and deliver Insulated Dome covers and bases 2017-11-03 11:00 ZNQ: 697/ 17- 18
Appointment of a service provider for the rental and maintenance of water dispensers for The Department of Arts and Culture (DAC) for a period of two years 2017-11-10 11:00 DAC 10/ 17- 18
Supply and deliver Platform Trolley 2017-11-03 11:00 ZNQ: 687/ 17- 18
Gown surgical sterile re-inforced large x 7000 units 2017-11-01 11:00 108/ 07/ 17
Appointment of a service provider to render strategic and special projects management services 2017-11-15 11:00 DAC 12/ 17- 18
Pest control of hospital and residents = 12 months 2017-11-06 11:00 ZNQ 452/ 17/ 18
The appointment of a private security contractor to render a security service at the Aquarium Building, Beach Road, Sea Point, Western Cape Province For a period of 2 years. 2017-11-10 11:00 4.4.12.4/ MLRF 149/ 18
Advanced SIPAP non invasive ventilation machine X 1(specifcation attached) 2017-11-01 11:00 190/ 10/ 17
Supply vaccine fridges = 02 each 2017-10-30 11:00 ZNQ 450/ 17/ 18
Supply: 30 Units, Hyluronic acid VFF (volume restoration factor) 30 10mls 2017-10-30 11:00 ZNQ: 788/ 17/ 18
Invitation to service providers for the supply of laptops and desktops to CIPC on a “as and when” basis under a warranty and support contract for three years (36 months) 2017-11-22 11:00 CIPC 16/ 2017/ 2018
Repair a main gate at Gate way clinic 2017-10-30 11:00 ZNQ 294/ 17/ 18
For rendering of security (guarding) services at the national museum (nm), no: 36 Aliwal Street, Bloemfontein and Oliewenhuis Art Museum, no 16 Harry Smith Street, Bloemfontein for a period of thirty six (36) months. 2017-11-13 12:00 NMSE/ 2017/ 001
Supply and Delivery of Cartridges for Tswelopele Correctional Centre :Supply Chain: Period: ONCE-OFF :Area Commissioner :Kimberley Management Area:Department of Correctional Centre:Free state and Northern Cape Region: 2017-11-20 11:00 KBY 02/ 2017
Supply 11 x Disclaimer with prohibited sign for 11 clinics 11 x services board for 11 clinics 2017-10-30 11:00 ZNQ 401/ 17/ 18

Pages

Functionality and Tenders

In all competitive bids (tenders) you as the bidder will have to respond to Functionality. You will need to score a set minimum number of points, measured as a percentage, on Functionality of a competitive bid (tender) in order to advance to the next phase of evaluation in the tender process.

Usually Organs of State evaluate competitive bids (tenders) as follows:

  • The tender response is evaluated on Functionality where the bidder must score points out of a maximum of 100 points.
  • A threshold of between 65 to 75 out of 100 points... Read More
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