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.
Ventilation,ligthing and noise survey for all wards and clinics according to specs 2017-12-03 11:00 ZNQDN265/ 17GAZ
Tender No. 38/2017 - Provision of Insurance Brokerage Services to Legal Aid South Africa for a period of three (3) years 2018-01-12 11:00 38/ 2017
Cleaning of diesel tanks 2017-12-03 11:00 ZNQDN264/ 17GAZ
Co-operation Agreements with Legal Aid SA for the Provision of Civil Legal Services to indigents of a particular specialist nature or in specific areas situated throughout the Republic of South Africa for a period of three (3) years. 2018-01-12 11:00 40/ 2017
Service Theater Tables Including Casualty 2017-11-24 11:00 ZNQ1544/ 17/ 18
To appoint a suitably qualified Events Management company to conceptualize and implement the Annual Simon “Mabhunu” Sabela Film and Television Awards for a period of 3 years. 2017-12-15 11:00 T30/ 2017/ 18
Supply and delivery of 24000 comfort packs (toiletries, towels, slippers etc for a period of thirty-six (36) months 2017-12-08 11:00 SCMU3- 17/ 18- 0029- HO
Supply: 100 rolls of paper thermal printing type v (high gloss 110mm x 18m (10 units per box) 2017-12-04 11:00 ZnqSN555/ 17gaz
Provision of turnkey services/solutions for delivery of the following: Space Planning, interior design, fit-out and supply & delivery of furniture; Interior refurbishment and upgrade of existing office facilities.; Re-Installation and upgrades of electrical/mechanical and ICT infrastructure. 2017-12-15 11:00 GGB/ RFP/ 001/ 2017
Supply: 20 units of toner cartridges black hp laser jet CE390A (original) 2017-12-04 11:00 ZnqSN516/ 17gaz
Suitably qualified service provider to be appointed to conduct price rationalization and standardization fro GEP BDS & TBR Projects 2017-12-13 11:00 GEOP08/ SP/ Price Rationalization
Appointment of a suitable travel management service provider to administer and service in conjunction with the FDC all the travel requirements and related requirements. 2017-12-12 12:00 FDC BID NO. 005/ 2017
Supply of funeral palor services (collection, transportation, storage and burial) to Nkqubela TB hospital in the Buffalo City Metro Health District, Eastern Cape Department of Health for a period of thirty-six (36) months 2017-12-08 11:00 SCMU3- 17/ 18- 0035- HO
Request for proposal - Review of Value Added Tax (VAT) for the Free State Development Corporation. 2017-12-13 12:00 FDC RFP NO. 006/ 2017
Service of High Voltage Transformer and Medium Voltage Switchgear at dannhauser chc 2017-12-06 11:00 ZNQ 235/ 17/ 18
The Financial Intelligence Centre request proposals from service providers for procurement of an Automated Web Search Application for use by the Financial Intelligence Centre 2017-12-12 11:00 FIC/ RFB/ 0009/ 2017/ 18
Fasset is seeking to appoint a panel of accredited, suitably qualified and experienced train-ing providers to work with Fasset to train employees of Fasset member organisations 2017-12-08 10:00 FAS/ LD/ RES/ LL_GENERICM/ CON934
Servicing of Electrical Substation Kiosks 2017-11-24 11:00 494/ 017/ 018
Request for proposals from a Professional Registered Structural Consultants Firm to act as a principal agent for Roofing (Harvey tile), Roads construction and Gate construction for Ezemvelo KZN Wildlife resorts. 2017-12-07 11:00 EKZNW 29/ 2017
Road to Health Booklet 2017-11-24 11:00 ZNQ 437/ 17- 18

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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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