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.
Dental laboratory service for Prostodontis 2018-06-04 11:00 ZNQ 194 of 18/ 19
Annual service of Infrared testing on electrical installation. 2018-06-08 11:00 H104/ 18/ 19
Annual service of Nurse calling system. 2018-06-08 11:00 H102/ 18/ 19
Major service to autoclaves - companies must be registered on CIBD (2ME). 2018-06-01 11:00 ZNQ 109/ 2018
The Periodic Maintenance of TR 35/1 Between Beaufort West and the Eastern Cape Borders (Km58.00 To Km 74.22) 2018-06-28 11:00 S034/ 18
The Periodic Maintenance of tr 30 Section 1 from Langhoogte (Km0.00) to Villiersdorp (Km 22.43) and Section 2 from Villiersdorp (Km 0.38) to to Worcester (Km 12.00). 2018-06-28 11:00 S035/ 18
Vending machine rental services 2018-06-04 11:00 ZNQ 1264 of 17/ 18
Taylor Bequest hospital in Mt fletcher phase 2: Staff accommodation - renovations and additions 2018-06-22 11:00 SCMU3- 17/ 18- 0412- HO
Taylor Bequest hospital in Mt fletcher phase 1: New staff accommodation and prefabricated ablutions 2018-06-22 11:00 SCMU3- 18/ 19- 0040- HO
Major service to clarifiers -companies must be registered on CIBD (2ME ) 2018-06-01 11:00 ZNQ 110/ 2018
Repairs and Refurbishments of Gqebera Community Health Center at Nelson Mandela Metro - PE 2018-06-29 11:00 SCMU3- 17/ 18- 0359- HO
Isilimela hospital phase 1 in Gomolo, Port St Johns Municipality: Upgrading of existing accommodation and provision of 4 new prefabricated buildings 2018-06-22 11:00 SCMU3- 18/ 19- 0085- HO
Provision of Routine and Safety Maintenance on Various Roads within Camperdown Zone - Mpumalanga Area Office -Grade 7CE 2018-06-22 11:00 ZNT 4056/ 16T
Major service to theater lights (supply 20 bulbs)- companies must be registered on CIBD (2EB). 2018-06-01 11:00 ZNQ 106/ 2018
Provision of Routine and Safety Maintenance on Various Roads within Applesbosch Zone - Umshwathi Area Office -Grade 7CE 2018-06-22 11:00 ZNT 4017/ 16T
Provision of Routine and Safety Maintenance on Various Roads within Taylors Halt Zone 6 - Merrivale Area Office -Grade 7CE 2018-06-22 11:00 ZNT 4008/ 16T
Major service to power factor correction – companies must be registered on CIBD (2ME). 2018-06-01 11:00 ZNQ 105/ 2018
Provision of Routine and Safety Maintenance on Various Roads within Howick Zone1 - Vulindlela Area Office -Grade 7CE 2018-06-22 11:00 ZNT 3997/ 16T
Major service to uninterrupted power supply -companies must be registered on CIBD (2EB) 2018-06-01 11:00 ZNQ 107/ 2018
Repairs and Refurbishments of Leticia Bam Community Health Center at Nelson Mandela Metro - PE 2018-06-29 11:00 SCMU3- 17/ 18- 0360- HO

Pages

Tender adjudication process

The SBD/WCBD6.1 document must form part of all bids invited.  It contains general information and serves as a claim form for preference points for Broad -Based Black Economic Empowerment (B -BBEE) Status Level of Contribution, and explains how tenders or bids are decided.

The document says:

  • The bidder obtaining the highest number of points will be awarded the contract.
  • Preference points shall be calculated after prices have been brought to a comparative basis.
  • Points scored will be rounded off to two decimal places... Read More
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