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.
Replacement Contract: External maintenance and Landscape at L.A. Building, Ulundi 2017-10-20 11:00 ZNTU 02155 W
Supply: Lymphoedema intermittent pneumatic compression system (spec no. E41) 2017-10-03 11:00 ZNQ NO.1605/ 06/ 17
Supply: 100% sodium carboxymethylcellulose (NaCMC) Fibrous hydrocolloid dressing containing Ionic silver with surfactant(Benzethonium chloride) and chelating agent (EDTA) 20x30cm 2017-10-03 11:00 ZNQ NO.1683/ 07/ 17
JAN KEMPDORP: 93 AMMO DEPOT: Sealing of roofs at ammunition depot 2017-10-13 11:00 KM11/ 17
Supply: Portable spirometer handheld with built-in screen and thermal printer and pc software( as per spec). 2017-10-03 11:00 ZNQ NO.1657/ 06/ 17
KIMBERLEY SANDF: Repair and renovations to MP offices. 2017-10-13 11:00 KM12/ 17
Pretoria: Department of Defence: Joint Support Base (JSB) Garrisson Finance Office: Refurbishment 2017-10-17 11:00 Pt17/ 026
Supply: Heavy duty stainless steel tea trolley (as per spec) 2017-10-03 11:00 ZNQ NO.2513/ 08/ 17
Invitation to developers who own land to register on the department’s database of affordable residential developers to develop, at risk, fully bonded affordable houses, on their privately-owned suitably-located serviced land in various Urban areas of Kwa-Zulu Natal for qualifying beneficiaries of government’s finance linked individual subsidy program [FLISP], for a period not exceeding 36 months. 2017-10-20 11:00 ZNB15/ 2017/ 18HSE
Supply: C-mac stand (as per spec) 2017-10-03 11:00 ZNQ NO.2388/ 07/ 17
Supply: Adult/ Paediatric electronic platform scale with height measurement, capacity 150-200kg gradation 100G ( as per spec) 2017-10-03 11:00 ZNQ NO.2315/ 08/ 17
Strip, quote & repair heat pumps at the kitchen x 1 CIDB:1ME 2017-10-03 11:00 ZNQ 242/ 201718
Supply: Loop PDS polydioxanone - 1 loop 1/2 circle taper point ctx 48mm 240cm violet 2017-10-03 11:00 ZNQ NO.2380/ 08/ 17
Supply: Woundset foam port medium genadyne xlr8 plus wound vacuum system code GE5-EPFMO7/400 2017-10-03 11:00 ZNQ NO.2047/ 07/ 17
Supply: Non adhesive 3 layer foam dressing with outer polyurethane film and absorbant hydropholic core 20cm x 20cm 2017-10-03 11:00 ZNQ NO.2504/ 08/ 17
Supply: Thin hydrocolloid with gelatin, pectin and carboxymethycellulose for use with endotracheal tubes 5x20cm 2017-10-03 11:00 ZNQ NO.2043/ 07/ 17
Supply: Hyrodconductive wound dressing that can be layered 20x20cm Quantity: 20 boxes (10 per box) 2017-10-03 11:00 ZNQ NO.2040/ 07/ 17
Supply: Plumbing tools. N.b detailed specification is attached on the document. 2017-10-06 11:00 ZNQ 0182 2017/ 18
Supply: 10 units blender oxygen /medical air 2017-10-03 11:00 ZNQ 800/ 17/ 18
Supply: Plumbing material. N.b detailed specification is attached on the document. 2017-10-06 11:00 ZNQ 0181 2017/ 18

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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