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.
Provision of Office Accommodation: Siyabuswa Satellite Office for a leased period of 5 years.(Leases ranging from seven to ten years will also be considered) 2018-08-24 11:00 32/ 2018
ORBIT TVET College invites capable and competent service providers to supply and deliver New Classroom Furniture for CET. 2018-08-24 11:00 CET01/ 2018
Provision of Office Accommodation: Dundee Satellite Office for a leased period of 5 years.(Leases ranging from seven to ten years will also be considered). 2018-08-24 11:00 33/ 2018
Provision of a comprehensive catering service to Eerste River Hospital under control of the Department of Health, Western Cape Government for a 3-year period. 2018-08-17 11:00 WCGHSC0096/ 2018
Provision of Office Accommodation: Ladysmith Local Office for a leased period of 5 years.(Leases ranging from seven to ten years will also be considered) 2018-08-24 11:00 29/ 2018
Provision of Office Accommodation: Estcourt Satellite Office for a leased period of 5 years.(Leases ranging from seven to ten years will also be considered) 2018-08-24 11:00 27/ 2018
Supply Chest Freezer - Frost Free. 410 - 500L 2018-07-27 11:00 ZNQ 07/ 05/ 2018
Request for the procurement of external vendors to assist with creation of Records Centre. 2018-08-14 11:00 RFB 1773/ 2018
Provision of Office Accommodation: Port Shepstone Local Office for a lease period of 5 years or more 2018-08-24 11:00 28/ 2018
Provision of Office Accommodation: Grahamstown Local Office for a lease period of 5 years or more. 2018-08-24 11:00 35/ 2018
Draining Pumps; Circulator Pump 2018-07-27 11:00 ZNQ 30- 2018/ 19
Hosting Event Management, Erection Exhibition Stalls and Décor Services for the Department of Defence for the DOD Suppliers day. (Procurement Plan Number: DOD PROC PLAN 18-19/LOG DIV/572). 2018-08-20 11:00 CPSC- B- G- 085- 2018
Supply and delivery of building materials to 11 Sections in Tshakhuma Village, Vhembe District. 2018-08-13 11:00 WRC- 010- 18/ 19
Pounding yard for Department of Community Safety for a period of 60 months (05 years) 2018-08-10 11:00 GT/ GDCS/ 083/ 2018
Establishment of a Pre-Qualified Service Providers for the Supply and Installation of library furniture (including space planning and layout) for a period of 36 months. 2018-08-10 11:00 GT/ GDSACR/ 091/ 2018
The Rural Housing Loan Fund NPC (RHLF) is a Schedule 3A public entity and Development Finance Institution reporting to the Minister of Human Settlements. In terms of PFMA, the company is required to have an internal audit function reporting to its Audit and Risk Committee. As RHLF is a small entity this function is outsourced and the company now calls for tenders, from established internal auditing firms, to undertake this work from August 2018 for a three-year period. 2018-08-21 16:00 IA001
Appointment of a Qualification Development Facilitator to develop and realign occupational qualification. 2018-08-21 11:00 QDF/ PSETA/ 2018- 07
Mixer Pillar Elbow; Mixer Bib Elbow; Geyser 200 L; Geyser 150 L; Heavy Duty shire low level Cistern; PVC Toilet Flushing Mechanism 2018-07-27 11:00 ZNQ 31- 2018/ 19
NC092 - Dikgatlong Local Office Accommodation. 2018-08-10 11:00 IEC/ NC- 03/ 2018
Appointment of a service provider to supply, install and integrate an enterprise level Nintex or equivalent business process automation tool solution with the NRF’s existing sharepoint infrastructure and support the tool solution for a period of five years. 2018-08-16 11:00 NRF/ CORP- RISA ICT/ 002/ 2018

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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