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 Disaster Recovery (DR) Services, WAN Services, Cloud Services and Rack Rental 2017-10-13 11:00 GMA/ 007/ 17
Request for Qualification of the Tshwane Agroprocessing Hub O.B.O. Teda 2017-11-10 11:00 GT/ GIFA/ 122/ 2017
Provision of office space for lease for a period of 2 years with an option to extend for another 2 years 2017-10-17 11:00 Corp/ 2017/ 08
Appointment of a Qualified ICT Service Provider To Provide Or Develop a SETA Grant & Learner Management Integrated System (Sglmis) 2017-10-16 11:00 Corp/ 2017/ 09
Appointment of a panel of service providers to provide secretariat services for the period of three years to assist the MHSC when hosting events 2017-10-23 11:00 MHSC014/ 2017- 18
Appointment of a service provider to assist NERSA with media monitoring and analysis services for a period of two (2) years 2017-10-12 11:00 NERSA/ 1718/ CSM/ MMA/ BID009
Appointment of a Service Provider Conduct the Pilot Research Study on the Elements of Financial Costs and Economics of Disability for Children and Persons with Physical Disabilities in South Africa 2017-10-13 11:00 SD10/ 2017
Appointment of a service provider (s) to conduct forensic investigation on the Integrated Financial Management System (Ifms) Project. 2017-10-13 11:00 NT018- 2017
Appointment of a service provider to provide organisational capacity assessment to support PSETA strategy 2017-10-12 11:00 OD/ PSETA/ 2017- 09
Appointment of a Travel Management Company (Tmc) to Provide Travel Management Services to Robben Island Museum (Rim) for a period of thirty-six (36) months 2017-10-18 11:00 RIM FIN 01- 2017 / 2018
Request For Proposal: Corporate Travel Management Services 2017-10-30 14:00 RFP 2017/ 07
Virginia and Odendaalsrus Project Management Services to Conceptualise, Implement 2017-10-31 11:00 SADPMR03/ 2017/ 18
Job Grading, Remuneration Benchmark and Employee Engagement Services for Technology Innovation Agency. 2017-10-16 11:00 TIA013/ 2017
Appointment of an experienced service provider to provide Meeting management services for a 6 months period 2017-10-13 11:00 WRFQ CS 2017/ 001
Provision of personnel verification services on a 6 months contractual appointment. 2017-10-13 11:00 WRFQ PV 2017/ 002
Supply: 120 units of toner cartridge brother (TN 3290) (brother original) 2017-10-09 11:00 ZnqSN333/ 17gaz
Supply and deliver safety boots x 10 Pairs 2017-10-02 11:00 217/ 2017/ 18
Supply and delivery of Library Material 2017-10-24 11:00 19/ 1/ 9/ 1/ 06TS(17)
Supply and deliver plumbing materials 2017-10-05 11:00 ZNQ 13/ 05/ 2017
Supply: 03 Units-Ent Patient Examination Chair 2017-10-04 11:00 A 05/ 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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