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 and Appointment of a Reputable Landscaping and Garden Terrains (Deforestation / Tree Felling) and Indoor Plants Maintenance Contractor(S) Through an Rfb:- for a 3 Year Period at Various Sita Hq Campuses In Centurion, Erasmuskloof, Beta and Numerus With The Option To Include Future New Sites 2017-11-24 11:00 RFB 1651- 2017
Procurement of services for the establishment and implementation of multispecies aquaculture hatchery, Research And Demonstration Centre in the Eastern Cape for a period of three (3) years 2017-11-24 11:00 4.4.12.4/ MLRF 150/ 18
Supply and delivery of Crime Scene Protective Stepping Plates for a period of two (2) Years: Criminal Record and Crime Scene Management: Division: Forensic Services 2017-11-24 11:00 19/ 1/ 9/ 1/ 65TD (17)
Supply and deliver a replacement part on an Inspex 20i x-ray system: one (1) digital, flat panel x-ray detector 2017-11-24 11:00 NRF/ SAIAB/ 2018- 018
Provision of service provider to evaluate discretionary grants proposal 2017-2018 2017-11-23 11:00 011- 2017/ 2018
Provision of service provider to adjudicate discretionary grants proposal 2017-2018. 2017-11-23 11:00 010- 2017/ 2018
Procurement of a Sub-Zero Variable Black Body Source, Including Delivery, Installation And Commissioning 2017-11-24 11:00 NMISA (17- 18) T0042
Appointment of a service provider to provide comprehensive facilities management services at DPP Kimberley and Thuthuzela Care Centre for a period of three (3) years 2017-12-04 11:00 NPA 16- 17/ 18
Procurement of a High Temperature Variable Black Body Source, Including Delivery, Installation And Commissioning 2017-11-24 11:00 NMISA (17- 18) T0053
Procurement of a Medium Temperature Variable Black Body Source, Including Delivery, Installation And Commissioning. 2017-11-24 11:00 NMISA (17- 18) T0052
Procurement of a Low Temperature Variable Black Body Source, Including Delivery, Installation And Commissioning 2017-11-24 11:00 NMISA (17- 18) T0051
The Mjindi Farming (PTY) LTD seek to appoint a contractor for rendering security services for period of twelve months 2017-12-08 11:00 Tender
Procurement of a Tympanic (Ear) Variable Black Body Source, Including Delivery, Installation and Commissioning 2017-11-24 11:00 NMISA (17- 18) T0050
Appointment of a service provider to develop and implement a consumer education campaign for a period of twelve (12) months on 80/20 PPPFA: preferential procurement regulations, 2017. 2017-12-01 11:00 ICASA 13/ 2017
Appointment of a service provider for cleaning, pest control, hygiene, waste recycling and removal services at ICASA’s head office (Sandton) for a period of one (1) year 2017-12-01 11:00 ICASA 14/ 2017
Appointment of a service provider for the development and implementation of the migration plan, which includes the development of radio frequency spectrum assignment plans and an update to the IMT roadmap for a six (6) months 2017-12-01 11:00 ICASA 11/ 2017
The appointment of a service provider to provide safeguarding and Security services at the Department of Public Works: Head Office Complex, 191 Prince Alfred Street, PMB. 2017-12-01 11:00 ZNT 06/ 17/ 18
Supply and delivery of 300 Safety Kiosks over the period of two years for the Department of Community Safety 2017-11-24 11:00 GT/ GDCS/ 149/ 2017
Rendering of a comprehensive cleaning and hygiene Eco-Friendly service for Bellville Health Park “Green Building” for a three (3) year period. 2017-12-01 11:00 WCGHSC 0135/ 2017
Security Services required at Coastal KZN TVET College for the Central Office and 8 Campuses 2017-12-01 11:00 SS CKZN 02/ 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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