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.
Appoint a panel of service providers for training and capacity building of farmers and agricultural co-operatives in Tshwane: as and when required: three year period 2018-02-01 10:00 EMS 01-2017/18
Supply: Ibr colorplus /colorbond roof sheeting A 2017-11-24 15:00 GB11800550
Supply, delivery and fitting as well as repairs, maintenance and refurbishment of agricultural infrastructure in Tshwane: as and when required: three year period 2018-02-02 10:00 EMS 02-2017/18
Supply: Care packs 2017-11-28 12:00 GG11800244
Supply & Delivery of Water Testing Equipment 2017-11-24 12:00 SCM/2018/168/ENG
Die herstel en aanbring van beligting by die Amfiteater, te Paarlberg 2017-11-27 11:00 ATM/011-2017/2018
Supply and delivery of dry beans and maize for led projects 2017-11-27 12:00 Q004754
Catering of breakfast and lunch for 750 people at Vereeniging, Banquet Hall for the people’s assembly 2017-11-28 10:00 11/3/2018/15
Supply & Delivery of a Boat Engine 2017-11-24 12:00 SCM/2018/170/COMM
12 buses that will ferry community members to people's assembly at Vereeniging Banquet Hall 2017-11-28 10:00 11/3/2018/16
Bus Hire: Umkomaas to Kelso 2017-11-28 12:00 PR 10264223
Bus Hire: Northdene to Pinetown 2017-11-28 12:00 PR 10264228
Bus Hire: Rossburgh to Pinetown 2017-11-28 12:00 PR 10264226
Bus Hire: Bellair to Malvern 2017-11-28 12:00 PR 10264219
The MBDA requires Decor and Entertainment for Friday 01 December 2017 at the MBDA's offices 2017-11-24 11:00 BDA1117500
Skills development providers to offer LGSETA learning programmes 2017-11-28 12:00 10/2017
Bus Hire: Rossburgh to Bellair 2017-11-28 12:00 PR10264229
The MBDA requires catering for 120 people for Friday 01 December 2017 2017-11-24 11:00 BDA1117499
Bus Hire: Umgeni to Duffs Road Via Greenwood Park 2017-11-28 12:00 PR 10264240
Bus Hire: Amanzimtoti to Karridene 2017-11-28 12:00 PR 10264222

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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