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.
Appointment of Service Provider to Supply office Automation (Printing/Copying) Equipment and Associated Services to Emvelo Kzn Wildlife for a period of three (03) years 2017-08-21 11:00 EKZNW 20/ 2017
Supply and delivery of Hotelier Beds [as and when required] to Ezemvelo KZN Wildlife Resorts for a period of three (03) years 2017-08-21 11:00 EKZNW 14/ 2017
Supply, delivery and installation of photocopiers at Electoral Commission [IEC] Local Offices, South Africa 2017-08-11 11:00 0010359775
Supply, delivery and installation of office furniture - Electoral Commission Local Offices throughout South Africa 2017-08-11 11:00 0010360455
Bandages - Adhesive Plaster - Size: 50mm X 4.5mt Long. as per specification 2017-08-01 11:00 ZNQ 538/ 17 - 18 GAZ
Bandages - Plaster of Paris - Size: 200mm X 3.5mt. as per specification 2017-08-01 11:00 ZNQ 536/ 17 - 18 GAZ
Bandages - Crepe - Size: 100mm X 4.5mt. as per specification 2017-08-01 11:00 ZNQ 534/ 17 - 18 GAZ
Bladeless Atraumatic Trocar With Stability Sleeve - Size: 12mm 2017-08-01 11:00 ZNQ 531/ 17 - 18 GAZ
Karman Cannulae with Adaptor 2017-08-01 11:00 ZNQ 529/ 17 - 18 GAZ
Linear Cutter - 75mm. 2017-08-01 11:00 ZNQ 521/ 17 - 18 GAZ
Adhesive Dressing - Absorbent/ Water Proof / Fluid - Size 25cm X 10cm 2017-08-01 11:00 ZNQ 520/ 17 - 18 GAZ
Laproscopic Reload - Sterile - Latex Free as per specification 2017-08-01 11:00 ZNQ 530/ 17 - 18 GAZ
Neonatal Splint - Size: +- 8 to 9 Cm in Length and 2.5cm to 3cm Wide as per specification 2017-08-01 11:00 ZNQ 526/ 17 - 18 GAZ
Ultrasonic Dissecting Instrument (Focus) as per specification 2017-08-01 11:00 ZNQ 525/ 17 - 18 GAZ
Atraumatic Graspers - 5mm - Length 36cm - Reusable 2017-08-01 11:00 ZNQ 524/ 17 - 18 GAZ
Curved Cutter / Stapler - Size: 3.0mm Length X 3.5mm Height 2017-08-01 11:00 ZNQ 523/ 17 - 18 GAZ
Modified Bipolar Vessel Sealing Device, Single Use -Small Jaw. as per Specification 2017-08-01 11:00 ZNQ 522/ 17 - 18 GAZ
Tubing, Latex (205) as per specification 2017-08-01 11:00 ZNQ 398/ 17 - 18 GAZ
Ligasure Impact Tissue Fusion - Open Instrument - Size: 13.5mm. as per specification 2017-08-01 11:00 ZNQ 355/ 17 - 18 GAZ
Catheter - Argyle - 40cm - Size 22g, as per specification 2017-08-01 11:00 ZNQ 299/ 17 - 18 GAZ

Pages

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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