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.
Supply: 108 Cases - Swabs Abd Tape R/Op Sterile 370 X 450mm - 4ply ( 48 Pouches In A Case - 5 Pcs In A Pack ) 2017-10-04 11:00 290/ 17
Plumbing and carpetry material for Umlazi K Clinic U,L,Q,D,V Magabheni, Umnini,Danganya,Folweni and Umbumbulu. 2017-10-03 11:00 ZNQ 804/ 17/ 18
Supply and delivery of: 1. Electro Surgical Unit for Large Loop Excision of Transformation Zone (Lletz) Procedure H.T.S. No.E2 ( Electronics ) Umdns: 11490 2017-10-02 11:00 ZNQ525/ 2017- 2018
IG-541 Gas Fire Suppression 2017-10-17 11:00 NLSA.PTA.IG- 541GAS 08/ 2017
Wesselsbron SAPS: Repair and Maintenance. CIDB Grading 5GB or higher and 4GB PE 2017-10-17 11:00 BL17/ 009
Supply Granuflex E 20x20 Triple Hydrocolloid Dressing X 30 Boxes 2017-10-02 11:00 ZNQ 379/ 17/ 18
Provision of Office Accommodation: Elliot Satellite Office for a period of 5 years. (Leases ranging from seven to ten years will also be considered). Office space between 102m² and 157m² and 4 parking bays are required 2017-10-24 11:00 25/ 2017
Supply Brush Cutter 1.9kw,Weight 8.0kg.Fuel Capacity 0.67 =13 Each 2017-10-02 11:00 ZNQ 378/ 17/ 18
Purchase of building: Port Elizabeth Justice Centre Office space between 1187m² and 1262.40m² and 12 parking bays are required. 2017-10-24 11:00 23/ 2017
Supply Battery Operated Vehile E242 Hd =01 Each 2017-10-02 11:00 ZNQ 374/ 17/ 18
Provision of Office Accommodation: Verulam Justice Centre for a period of 5 years. (Leases ranging from seven to ten years will also be considered). Office space between 580m² and 661.20m² and 9 parking bays are required 2017-09-24 11:00 26/ 2017
Supply: Bacteria binding gauze with dacc coating 7x9cm 2017-10-03 11:00 ZNQ NO.2505/ 08/ 17
Provision of Office Accommodation: Secunda Satellite Office for a period of 5 years. (Leases ranging from seven to ten years will also be considered). Office space between 138.90m² and 142.80m² and 3 parking bays are required. 2017-10-24 11:00 24/ 2017
Supply: Sapphire orphthalmic blades:2.65mm clear corneal 60 degree blade -1box(6 units each) 2017-10-03 11:00 ZNQ NO.650/ 05/ 17
Pietermaritzburg: Department of Office of the Premier: Terry Street Parking and fencing project: CIDB grading 4 CE 2017-10-25 11:00 ZNTM00956W
Supply: Portable automatic body mass index scale stadiometer (as per spec). 2017-10-03 11:00 ZNQ NO.2264/ 08/ 17
Department of Co-operative Governance and Traditional Affairs: Repairsand Renovations to the remainder of Withby Lodge: CIDB grading: 4GB 2017-10-24 11:00 ZNTM00775W
Supply: Disposable surgeons gowns bacterial viral barrier gowns AAMI- level 4, size large 25-30units/case( as per spec). 2017-10-03 11:00 ZNQ NO.2212/ 08/ 17
Office of the Public Protector: Procurement of office accommodation comprising 731.21m² and 20 Parking Bays in Braamfontein/Parktown/ Aucklandpark for a period of five (5) years. 2017-10-25 11:00 JHB.17/ 27
Supply: Disposable surgeons gowns bacterial viral barrier gowns AAMI- level 4, size XXX large 25-30units/case( as per spec) 2017-10-03 11:00 ZNQ NO.2213/ 08/ 17

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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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