Issue Date: 
Thursday, October 31, 2019

Principles when pricing your tender

By Werner van Rooyen, Director of HowToTender (Pty) Ltd which specializes in tender consulting and tender training.

Many people ask the question “how must we work out our tender price?”, but there is no simple answer, because every tender is different, e.g. a tender for the supply of furniture will have a different pricing structure than a tender for the supply of food for a government function. So, to provide individual pricing techniques would be exceedingly difficult.

In general, there are these ten points that must be dealt with when calculating price:

  1. Price is king – ensure you price your product/service as low as possible, to stand a chance at winning a tender.
  2. Be precise, when the product supplied is R 101,26 then state it in the tender response as that and not as R 101,00 or even R 102,00.  Slight differences like these can amount to substantial amounts that can be lost, depending on the size of the tender.
  3. Ensure that all the costs of delivering the product/service are taken into consideration; double check your pricing – something small not included can be to your disadvantage.
  4. Confirm prices of goods with your suppliers.  Prices can change very quickly due to increases in fuel prices or exchange rate fluctuations.
  5. Always remember to add Value Added Tax (VAT) at 15% to your price, especially when it relates to Government tenders.  Most tenders state that the price must include VAT.
  6. Ensure that all other applicable taxes are included in the tender price.
  7. Most importantly, never bid too low or too high;
    • Bid Evaluation Committees are well informed, and they will know if a is bid too low or too high;
    • Bidding too low or too high might lead to a tender response being disqualified or marked as non-responsive;
  8. Law can influence pricing as well.  Several industries in South Africa, such as the cleaning industry, has minimum wages payable to employees;
  9. A suggestion is that if your usual mark-up is 25% then tender 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.
  10. 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 for less than R50 million, and 90 out of 100 points for tenders with a value of more than R50 million. The bidder with the lowest price receives the most points.

To learn more about this and many other tender conditions attend our “Become a Tender Expert” 2-Day workshops presented in Johannesburg, Pretoria, Durban, Port Elizabeth, and Cape Town.  Book and pay online at https://howtotender.co.za/tender-expert-form/

Contact us at wernervr@howtotender.co.za should you require more information.

You can also purchase a Tender Manual (Handbook) on our website https://howtotender.co.za/ which is a step by step guide how to respond to a South African Tender.  It includes examples of completed SBD forms.

Title Closing Date Tender No.
PNQ4 IT HARDWARE. 2021-05-20 10:00 PNQ4 IT HARDWARE
PNQ4 HARDWARE 2021-05-20 10:00 PNQ4 HARDWARE
PNQ4ELECTRICAL 2021-05-20 10:00 PNQ4ELECTRICAL
Supply , Delivery and Off-Loading of Toilet Paper and Hand Towels as From 01 July 2021 – 30 June 2024 2021-05-31 12:00 B/SM 94/21
Sampling and Testing of Potable and Waste Samples in The Stellenbosch Municipal Area for a Contract Period Ending 30 June 2024 2021-06-07 12:00 BSM 100/21
Additions and alterations for Community Development Offices in 21 Simonsberg Street, Stellenbosch 2021-06-07 12:00 B/SM 99/21
Provision of travel management services to the Buffalo City Metropolitan Development Agency Soc Ltd (BCMDA) for a period of 3 years 2021-06-14 12:00 BID 3 OF 2021
Underwriting & Management of Municipal Short Term Insurance & Risk Portfolio: Contract period: 1 July 2021 to 30 June 2022 2021-06-02 12:00 B/SM 102/21
Provision Of Professional Services for the Design, Tender Documentation and Contract Supervision For New Cells and Associated Infrastructure at The Stellenbosch Landfill 2021-06-14 12:00 BSM 98/21
Supply and Delivery Of 100w Lamps: 7258 2021-05-19 11:00 None
Supply and Delivery of Strapping: 10786 2021-05-19 11:00 None
Supply and Delivery of Advanced Multi-Meter. 2021-05-20 11:00 None
Supply and Delivery Of Frl 95 – 240 Mech Sc (5351) 2021-05-20 11:00 11657916
Supply and Delivery of Pole Mount Dome Miniature Circuit Breaker Cover Item: 540 2021-05-24 11:00 None
Tenders are invited for SANA CALIBRATION FOR TESTO SAVERIS 2 DATA LOGGER WIFI SYSTEM. 2021-05-20 11:00 CSQ04212236
Tenders are Invited for the Repair and Replace GC and GC-MS lines as per Specification, available at SCM:Acquisitions, Harrower Road Port Elizabeth. 2021-05-20 11:00 CSQ04212247
Tenders are invited for the Renovation of Extraction System for Chemical Woods as per Specifications, available at SCM: Acquisitions, Harrower Road, Port Elizabeth. 2021-05-20 11:00 CSQ04212247
Tenders are invited for Supply and Delivery of Laboratory Glassware as per Specification, Available at SCM: Acquisitions, Harrower Road, Port Elizabeth. 2021-05-20 11:00 GQ04212772
Tenders are invited for the Purchasing of Microbiological Laboratory Media as per Specification, Available at SCM: Acquisitions, Harrower Road, Port Elizabeth. 2021-05-20 11:00 GQ04212772
Request for Expression of Interest – Air Conditioning Consultancy Firm 2021-05-25 16:00 ADB/EOI/RDGS/2021/0076

Pages

Who is the bidder or his or her representative?

By Werner van Rooyen, Director of HowToTender (Pty) Ltd which specializes in tender consulting and tender training.

In Organ of State tenders, the Standard Bidding Document 4 – Declaration of Inters – ask in paragraph 2.1 the following: “Full name of bidder or his or her representative... Read More

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