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.
Procurement of Marketing and Promotional Material Contract for a period of three years for Lephalale TVET College 2017-12-14 11:00 LEPTVETCOL2017/ 004
Acquisition of land for construction of RTMC office premises 2017-12-13 11:00 RTMC BID 14/ 2017/ 18
Supply gauze swabs 8 ply sterile 100x100, 500 pouches per case. (250 boxes) 2017-11-28 11:00 389/ 17- 18
Supply and install fridge tags x 45 units. 2017-11-24 11:00 ZNQ 216/ 17
Service provider to replace all class 0 to class 2 copper pipe and give a detail report about water quality and recommended service provider must be CIDB grade 1GB & 1SO grades 2017-11-28 11:00 200/ 2017/ 2018 NSI
Supply and installation of wall mounted handrails and accessories as per specification 2017-12-04 11:00 ZNQ 894/ 17- 18
Supply and deliver Office Furniture for Ems uMgundundlovu 2017-11-24 11:00 278/ 17/ 18
Panel of legal service and other related services to the RTMC for a period of three years 2017-12-12 11:00 RTMC BID 15/ 2017/ 18
The Road Accident Fund (RAF) invites an experienced and suitable service provider to Edit, Design Layout, and Print the RAF Annual Reports for a period of three (3) years. 2017-12-15 11:00 RAF/ 2017/ 00065
Repairs to extractor fan hood x 2 units 2017-12-01 11:00 ZNQ 218 / 17 - 18
Re-advertised: vaccine refrigerators - single door (06) 2017-11-24 11:00 62/ 05/ 2016
Implementation Evaluation of the South African Police Service Detective Service: Crime Investigation Service 2017-12-11 12:00 DPME11/ 2017- 18
Procurement of OHSC Server infrastructure and services for a period of five (5) years 2017-12-11 11:00 OHSC/ 02/ NOV/ 2017
Supply: 01 Set, Lounge suit with, genuine leather, black in colour 2017-11-27 11:00 ZNQ 479/ 17/ 18
Provision of a Training Provider to Provide an Engaging Leadership Development Fiveday Short-Course Programme for Health Managers in Western Cape Government Health for a three (3) year period 2017-12-15 11:00 WCGHSC 0126/ 2017
Appointment of a service provider to render communications and media production agency services for The National Consumer Commission for a period of thirty six (36) months 2017-12-15 11:00 NCC/ 02/ 2017/ 18
Appointment of a service provider to conduct research project regarding the issuing of self contained rescuers (SCSR) to mining employees. 2017-12-15 11:00 MHSC016/ 2017- 18
Service eto gas sterilizers 2017-12-03 11:00 ZNQDN263/ 17GAZ
LGSETA hereby invites interested parties to submit their proposals for the implementation of a business Workflow Management Solution. 2017-12-08 12:00 LGSETA/ ICT/ 17/ 18/ 01
Provision of a National Brand Perception Survey for Legal Aid South Africa for a period of 2 months. 2018-01-11 11:00 41/ 2017

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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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