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.
Multiband Ligater Kit, Single Use 8.5 - 11.5mm Scope Diameter With A Clear Barrel For Bonding Oesophageal Vverices. 2018-10-02 11:00 ZNQ NO.2773/ 08/ 18
Supply, Delivery and Off-loading of Cleaning Material and Toiletries for Klerksdorp, Rustenburg and Rooigrond Management Areas (North -West Province). 2018-11-06 11:00 LMN 10/ 2018 NORTH - WEST
Stoma Adhesive Protective Powder Alcohol Free, 28.3g. 2018-10-02 11:00 ZNQ NO.2591/ 08/ 18
Supply, Delivery and Off-loading of Groceries, for Klerksdorp, Rustenburg and Rooigrond Management Areas (North -West Province). 2018-11-06 11:00 LMN 07/ 2018 NORTH - WEST
Equipment: Heating Pan, Rectangular with Non Stick Heating Surface, Portable Design, Including Aluminium Lid with Handle and a Heavy Aluminium Gauge for Even Heat Distribution 2018-10-02 11:00 ZNQ NO.2619/ 08/ 18
Supply, Delivery and Off-loading of Coal Peas, Thohoyandou Management Area (Limpopo Province ). 2018-11-06 11:00 LMN 15/ 2018 LIMPOPO
Non Adherent Dressing With Soft Silicone Technology Atraumatic Dressing, Dressing With Safetac Dressing 20x30. 2018-10-02 11:00 ZNQ NO.2593/ 08/ 18
Bacteriostatic Gel which Containspropylene Glycol (Box Of 10) 15g Tubes 2018-10-02 11:00 ZNQ NO.2592/ 08/ 18
Supply, Delivery and Off-loading of Groceries for Thohoyandou and Polokwane Management Areas ( Limpopo Province) 2018-11-06 11:00 LMN 09/ 2018 LIMPOPO
Smooth Bore Breathing Circuits With Extra Limb And 2lt Breathing Bag Adult (3 Limb) 1.6mtr Long 2018-10-02 11:00 ZNQ NO.2586/ 08/ 18
Disposable Bed Sheets - 100cm X 200cm, Sample Required With Quote. 2018-10-02 11:00 ZNQ NO.2528/ 08/ 18
Supply, Delivery and Off-loading of Cleaning Material and Toiletries for Thohoyandou and Polokwane Management Areas ( Limpopo Province) 2018-11-06 11:00 LMN 12/ 2018 LIMPOPO
Adaptic Digit Non Adhering Dressing Digit. 2018-10-02 11:00 ZNQ NO.2526/ 08/ 18
Supply: Teledyne Benthos 867 Battery Replacement Kits (3002855) - x 4. 2018-09-28 11:00 RFQ000289
Suture Grasper 14 Gauge 15cm Length 2018-10-02 11:00 ZNQ NO.2479/ 08/ 18
Appointment of a services provider for the supply, delivery, training and maintenance of two waste palletizer. 2018-10-12 11:00 GT/ GDARD/ 131/ 2018
Please Supply Sxm40-40 Hot Water Circulating Pumps as per required specification 2018-10-02 11:00 ZNQ NO.2810/ 08/ 18
Supply and Install the Birds Deter Stand (See Picture Attached) Quantity: 1 Unit 2018-10-02 11:00 ZNQ NO.1523/ 06/ 18
Northern Cape: Upington and De aar Area: Rehabilitation of Bridges in Upington and De aar area. CIDB GRADING: 7 CE or Above. 2018-10-16 11:00 DRPW 001/ 2018
Supply, delivery, installation, training, commissioning, internal validation and support of a Microfluidics Fragment Analyser (MFA) for DNA analysis, for use in the Molecular Forensics Laboratory at UCT Health Sciences Faculty for the Western Cape Forensic Pathology Service. 2018-10-19 11:00 WCGHCC034/ 2018

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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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