Issue Date: 
Tuesday, September 20, 2016

10 Principles When Pricing Your Tender

Many people ask the question "how must we work out our tender price?", but there is no simple answer, because every tender is different, e.g. a tender for the supply of furniture will have a different pricing structure than a tender for the supply of food for a government function. So, to provide individual pricing techniques would be very difficult.

In general, there are these ten points that must be dealt with when calculating price:

  1. Price is king - ensure you price your product/service as low as possible, to stand a chance at winning a tender.
  2. Be precise, when the product supplied is R 101,26 then state it in the tender response as that and not as R 101,00 or even R 102,00. Slight differences like these can amount to large amounts that can be lost, depending on the size of the tender.
  3. Ensure that all the costs of delivering the product/service are taken into consideration; double check your pricing - something small not included can be to your disadvantage.
  4. Confirm prices of goods with your suppliers. Prices can change very quickly due to increases in fuel prices or exchange rate fluctuations.
  5. Always remember to add Value Added Tax (VAT) at 15% to your price, especially when it relates to Government tenders. Most tenders state that the price must include VAT.
  6. Ensure that all other applicable taxes are included in the tender price.
  7. Most importantly, never bid too low or too high;
    • Bid Evaluation Committees are well informed and they will know if a is bid too low or too high;
    • "    Bidding too low or too high might lead to a tender response being disqualified or marked as non-responsive;
  8. Pricing can be influenced by law as well. Several industries in South Africa, such as the cleaning industry, has minimum wages payable to employees;
  9. 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.
  10. 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 for less than R50 million, and 90 out of 100 points for tenders with a value of more than R50 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. For more information on the tender courses please email Werner at werner@how2tender.com.

This article was written by Werner van Rooyen, Director of HowToTender (Pty) Ltd. which specializes in tender consulting and tender training.

Title Closing Date Tender No.
Request to Invite Bidders to Submit Connectivity Solution and Indicative Costing to Extend Sita Network to Vendor Neutral Facilities for a period of thirty-six (36) months 2018-10-22 11:00 RFI 1803/ 2018
Request For Proposals for Supply, Installation and Maintenance of Printer Equipment’s – Operating lease for a period of 36 months 2018-10-23 11:00 RFB/ 2018/ PSiRA/ 07
Supply and Delivery of a 40GHz Vector Network Analyser 2018-10-15 11:00 NRF SARAO SDDS 003 2018
Supply and Fitment of New Automotives Gearboxes,Differentials and Transfer Cases to the South African Police Service for the period of two(2) years 2018-10-01 11:00 19/ 1/ 9/ 1/ 70TV(18)
Supply and Fitment of Re-Manufactured and New Driveline Units to the South African Police Service for the Period Of Two(2) Years. 2018-10-01 11:00 19/ 1/ 9/ 1/ 62TV (18)
Request For Information (RFI) for Digital Pen Management Solution for the South African Police Service: Division: Technology Management Services 2018-10-23 11:00 Bid no. 19/ 1/ 9/ 1/ 84TR (18)
Appointment of a Service Provider to Supply and Deliver a Refrigerated Bakkie for Kamford Vismark Primary Cooperative In Lambert’s Bay in the Cederberg Local Municipality, West Coast District in the Western Cape Province. 2018-10-12 11:00 SSC WC 04 (2018 / 2019) DRDLR
Appointment of a Service Provider to Supply and Deliver Fencing Material to Ebenhaeser, Matzikama Municipality 2018-10-12 11:00 SSC WC 15 (2018/ 2019) DRDLR
Supply and Delivery of Head Protection System to The South African Police Service for a period of two (2) years 2018-10-11 11:00 19/ 1/ 9/ 1/ 65 TT (18)
Frontier and Komani Hospital in Komani (Queenstown), Enoch Mgijima Local Municipality , EC Province : Renovations to existing staff accommodation buildings 2018-10-26 11:00 SCMU3- 18/ 19- 0287- HO
Bhisho Hospital, Bhisho, Buffalo City Municipality - Upgrading Of Theatre Mechanical and Electrical Equipment 2018-10-31 11:00 SCMU3- 18/ 19- 0247- HO
Supply, Delivery, Installation & Commissioning of a 3D Endo-anal Endoscopic Ultrasound System: Greys Hospital: Once Off 2018-10-15 11:00 ZNB 9622/ 2018- H
Supply, Delivery, Installation & Commissioning of a Rigid Paediatric Bronchoscope Set: Greys Hospital: Once Off 2018-10-15 11:00 ZNB 9621/ 2018- H
Supply and Delivery of a Wide - Field Digital Retinal Imaging System (“retcam”) (Spec No. E205) For Ngwelezane, Mccord and Edendale Hospitals: once off. 2018-10-16 11:00 ZNB 9626/ 2018- H
Supply, Delivery and Off-loading of Coal Peas at Barberton, Bethal and Witbank Management Areas (Mpumalanga Province) 2018-11-06 11:00 LMN 14/ 2018 MPUMALANGA
Supply, Delivery and Off-loading of Cleaning Materials and Toiletries at Barberton, Bethal and Witbank Management Areas (Mpumalanga Province). 2018-11-06 11:00 LMN 11/ 2018 MPUMALANGA 2
Supply, Delivery and Off-loading of Groceries at Barberton, Bethal and Witbank Management Areas (Mpumalanga Province). 2018-11-06 11:00 LMN 08/ 2018 MPUMALANGA
Disposable Antimicrobial Antifungal Step - On Umlingo Mat - 90 X 115cm 2018-10-02 11:00 ZNQ NO.2705/ 08/ 18
Endoscopic Injection Therapy Needle 22 -23 Gauge Catheter, 230cm Length, 2.0 Working Channel For Injection Of Bleeding Ulcers. 2018-10-02 11:00 ZNQ NO.2772/ 08/ 18
Supply, Delivery and Off-loading of Coal Peas for Klerksdorp, Rustenburg and Rooigrond management areas (North -West Province) 2018-11-06 11:00 LMN 13/ 2018 NORTH - WEST

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Advantages and disadvantages of Consortiums

Consortiums are often considered as entities to use when responding to tenders in South Africa. The question that arises is whether to use a Consortium or a Joint Venture when responding to a tender. To help you with this we have compiled a list of advantages and disadvantages for both Consortiums as well as Joint Ventures. In this article we list the advantages and disadvantages of Consortiums. Look out for the same article on Joint Ventures.

Consortiums Advantages:

  • Easy to establish as there are no formal procedures... Read More
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