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.
Printing and distribution of monthly service accounts and newsletters. 2018-05-25 12:00 TENDER 108-17/18
Security services for Majuba Power Station. 2018-05-28 10:00 MPGXC005139
Appointment of a multi-disciplinary team for the design and build for the following NSIP Project: Project A (Thembalihle & Lindokuhle Stations). 2018-05-29 12:00 KZN/CRES/10/2017/031/T
Supply and Delivery of 5 x Dual Ventilators for the Aviation Medical Evacuation Teams. 2018-05-22 11:00 CPSC- B- M- 001- 2018
Appointment of a multi-disciplinary team for the design and build for the NSIP Project: Project E (Mosley & Compensation Stations). 2018-05-28 12:00 KZN/CRES/10/2017/033/T
Provision of a Web Based Subscription Service Delivering Access to a Digital up-to-date Legal Information Sources to the Department of Defence for a period of thirty six (36) months. 2018-05-14 11:00 RFB 1728/ 2018
Appointment of a service provider for the establishment of a South African Association of Grant Professionals for the National Lotteries Commission (NLC) 2018-05-25 11:00 NLC/ 2018 - 3
Appointment of a service provider for provision of USAASA Head Office Space for a period of five(5) years 2018-05-14 11:00 USAASA- OFS/ 02/ 2018
Placement of chemistry analyser for the NHLS Free State and North West Region for a period of three years 2018-05-11 11:00 RFB070/ 17- 18
Provision for maintenance, service and repairs for lifts and goods hoists for a period of three (3) years 2018-05-10 11:00 RFB081/ 17- 18
Design, Supply, Upgrade and Refurbishment of lifts and escalators in Bellville Building, Western Cape. 2018-06-12 10:00 PSCED0117
Purchase of Portion 5 of the Farm Kildare No 14654 - FT. 2018-05-24 14:00 N003- 004- E- P- 1360
Rental of Office Space For the National Health Laboratory Service (NHLS) Eastern Cape Regional Management and Administration Office For a period of Five (5) years 2018-05-18 11:00 RFP002/ 18- 19
Placement or Outright purchase of fully automated Microbiology system for PMMH for a period of five (5) years. 2018-05-11 11:00 RFB 066- 17- 18
Mdutjana Magistrate Court: Cleaning Services for the period of twelve months with an option to renew for another twelve months, measuring 2172.23 Square Meters 2018-05-11 11:00 NST18/ 015
Provision for maintenance, service and repairs for lifts and goods hoists for a period of three (3) years 2018-05-10 11:00 RFB 010/ 18- 19
Placement of chemistry analyser for the NHLS Free State and North West Region for a period of three years 2018-05-11 11:00 RFB 009/ 18- 19
Request for proposals from service providers to develop an integrated trade and investment strategy for the province of Kwazulu-Natal. 2018-05-25 12:00 3210/ 2018/ 01
Evander Magistrate Court: Gardening Services for the period of twelve months with an option to renew for another twelve months, measuring 4041 Square Meters. 2018-05-11 11:00 NST18/ 016
Ermelo Magistrate Court: Cleaning Services for the period of twelve months with an option to renew for another twelve months, measuring 3034.11 Square Meters 2018-05-11 11:00 NST18/ 013

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
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