Issue Date: 
Tuesday, September 20, 2016

10 Principles When Pricing Your Tender

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 very 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 large 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. Pricing can be influenced by law 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 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.
  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 please attend one of our How-to-Tender workshops. Tender Workshop dates are published on our website at www.how2tender.com. For more information on the tender courses please email Werner at werner@how2tender.com.

This article was written by Werner van Rooyen, Director of HowToTender (Pty) Ltd. which specializes in tender consulting and tender training.

Title Closing Date Tender No.
Provision and Installation of Multifunctional Printers to the Various Administrative Offices in the West Coast District Municipality 2018-09-21 12:00 WDM 26/2018
Engineer, supply, deliver, and install 2 x new 6.6 kV Ring Main Units (4 way) to the Camden Ash Handling Plant. 2018-09-03 10:00 MPGXC005293
Supply and delivery of Flammable Liquids Storage Cabinets at Roads Workshop Moorreesburg 2018-08-24 12:00 6/5/2/383
Training Course for Conflict Resolution and Negotiation Skills 2018-08-27 12:00 6/5/2/111
Supply and Delivery of Pharmaceutical Grade Reagent Kits. 2018-09-03 11:00 iThemba LABS - RFQ/2018/19:80
Appointment of service provider for the Heights Training. 2018-09-03 12:00 RFQ/HO/03/2018
Groceries and General Supplies 2018-08-23 14:00 PNQ1 GROCERIES AND GENERAL SUPPLIES 3
Repair and maintenance work to air-conditioning system at Johannesburg Central area on an “as and when” required basis for a period of three (3) years. 2018-09-04 10:00 RFQ SIM 18005 CIDB.
Supply and delivery of handheld UHF Trunking portable radios. 2018-09-04 10:00 PTH/54412
Supply and provision of cleaning services at Elandsfontein for a period of two years. 2018-09-04 10:00 CRAC-ELF-27368
Supply: Trousers & jackets 2018-08-30 10:00 GA11900170
Supply: Deposit pad 2018-08-24 11:00 GM11900119
Condition Assessment and Testing of high voltage silicone insulators. 2018-08-29 14:00 SH11900012
Supply brush cotton twill peak cap 2018-08-28 10:00 GA11900167
Request for Professional Services to Submit a Feasibility Report: Future Development : Portion of Erf 2, Robertson also known as over-Het-Roodezand / Bulida Gronde 2018-09-07 12:00 T43/2018
Supply: Badges: law enforcement id shields with name. 2018-08-30 10:00 GA11900169
Rental of Chemical Toilets on an Adhoc Basis for the Provision of Basic Sanitary Services within the Langeberg Municipality for a period ending 30 June 2021 2018-09-21 12:00 45/2018
Supply and delivery of hardware. 2018-08-23 11:00 GK1190043A
Supply: Medical supplies 2018-08-23 15:00 GF11900117
The MBDA invites suitably qualified service providers to provide Sanitary Services at the The Science & Technology Centre for a 6 month period with the possibility of renewing it for a further 6 months, on a rental basis. 2018-08-28 11:00 BDA0818588

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10 steps in the bid process

Each year, Organs of State invite the Private Sector to submit competitive bids for the supply of goods and services. Organs of State bid requests attract SMME's and large businesses across a wide range of sectors - from office supplies to major construction projects.

Here is an overview of 10 steps you should take to prepare a competitive bid.

1.    Register your interest

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