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 a Panel to Supply ICT Hardware 2018-07-12 12:00 RFP006/ 2018
Service Theatre Table X 01 2018-06-29 11:00 ZNQ: 8975/ 18 NIEM
Service dental chair at Niemeyer Hospital X 01 KwaZulu-Natal. 2018-06-29 11:00 ZNQ: 8971/ 18 NIEM
C993.02: Reseal of TR75/1 (KM 0.00 to KM 16.50) Holgaten to Oudtshoorn. Designated CIDB Grading: 8CE or higher 2018-07-26 11:00 S048/ 18
Procurement of Human Resource Recruitment & Selection Service (x3) 2018-07-12 12:00 RFP004/ 2018
Inspection, maintenance & repair of the department fleet. 2018-08-19 11:00 ZNB468/ 15T
Supply, Installation and Maintenance of Multi functional Photo Copiers 2018-07-12 12:00 RFP008/ 2018
Appointment of a property management company or an agent to source office accommodation for USAASA for a period of five years in Gauteng. 2018-07-17 11:00 USAASA- OFS/ 04/ 2018
Provision of Legal Services 2018-07-23 11:00 EWSETA008/ 2018
Request for bid for renovation services for the National Health Laboratory Service at Bongani Provincial Hospital, Welkom. 2018-07-16 11:00 RFB 022/ 18/ 19
Terms of Reference for the maintenance of Security Operational Centre for GDED 2018-07-13 11:00 GT/ GDED/ 089/ 2018
Department of Health: RK Khan: Repairs and waterproofing of flat roof over physiotherapy department (contract period: 6 calendar Months). 2018-07-20 11:00 ZNTD 03917W/ WIMS 063046
Department of Public Works: Ethekwini Regional Office-Mayville: Tender Office relocation 2018-07-23 11:00 ZNTD 04435W
Appointment of a service provider to render cleaning and hygiene services for the Department of Rural Development and Land Reform - Mpumalanga Deeds Registry for a period of 24 months. 2018-07-16 11:00 DRDLR (CRD- 10) 2018/ 19
Annual service of Theatre UPS. 2018-07-02 11:00 C23/ 18/ 19
Supply , Installation and Commissioning of Bio-metric system 2018-07-24 11:00 EEC/ T06/ 2018
Appointment of Consultants/Professional Services for designing of plans for the following campuses: 1. Brakpan Campus-classrooms and offices. 2.Springs Campus-classrooms, offices and Hospitality kitchen 2018-07-24 11:00 EEC/ T10/ 2018
Appointment of Service provides to supply, deliver and offload Fertilizer for supplementing. 2018-06-28 11:00 ZNB 4261/ 18A
Appointment of a service provider for the revision of the HDA Business case, organisational design and resourcing framework. 2018-07-16 11:00 HDA/ JHB/ 2018/ 001
Appointment of Consultant/Professional Services for designing of 7 Main Entrances at College delivery sites 2018-07-24 11:00 EEC/ T09/ 2018

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
Free Keyword search

Search all tender notices for FREE!

No subscription or registration required!

You can also search by the reference of the the tender.

Advanced search

Search by Issuer, Region or Sector, individually, or using any combination of the three.