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.
First aid level 1 training. 2018-08-24 09:00 SM11900032
The MBDA seeks quotes from suitable service providers for Cleaning Material 2018-08-28 11:00 BDA0818587
Provision of 50kg DPC trolleys for the platforms at cape town station quantity of 50. 2018-09-04 16:00 RFQ163/2018
Supply & deliver Envelopes Manilla B5 250 X 176mm 2018-08-28 11:00 SQ08181255
Supply & deliver Lever Arch Files Pvc A4 70 X 1450mm 2018-08-28 11:00 SQ08181255
Supply and Delivery of Furniture 2018-08-28 11:00 GQ08181883
Supply and delivery of radio wireless. 2018-08-23 11:00 GK11900069
Supply non-sterile exam gloves 2018-08-29 10:00 GA11900171
Mandlakazi Rwss: Construction of 19.8km Water Reticulation Network – Package 3C 2018-09-20 12:00 ZDM043/2018
Construction of Mandlakazi Phase 5.5 Bulk Water Supply: 44km of Bulk Gravity Mains, Associated Reservoirs, Pumpstation and Rising Main 2018-09-20 12:00 ZDM055/2018
Supply Clothing 2018-08-28 10:00 GA11900168
Bid for the appointment of a training provider to conduct an accredited technical trades & operator’s training to municipal officials for each identified programme as and when required from the date of appointment until 30 June 2021. 2018-09-07 12:00 8/2/5/84 (2018-2021)
Ceza Stand Alone Water Supply Phase 2: Reservoirs and Weir 2018-09-06 12:00 ZDM 094/ 2018
Ceza Stand Alone Water Supply Phase 2: Reticulation 13 2018-09-06 12:00 ZDM 093/ 2018
Supply and installation of fault indicators on The 33KV AC Network. 2018-09-10 12:00 23/2018/CTN/INFRA
Ceza Stand Alone Water Supply Phase 2: Reticulation 12 2018-09-05 12:00 ZDM 092/ 2018
Ceza Stand Alone Water Supply Phase 2: Reticulation 11 2018-09-05 12:00 ZDM 091/ 2018
Supply and installation of fault indicators on The 33KV AC Network. 2018-09-10 12:00 23/2018/CTN/INFRA
Ceza Stand Alone Water Supply Phase 2: Reticulation 10 2018-09-05 12:00 ZDM 090/ 2018
Ceza Stand Alone Water Supply Phase 2: Reticulation 09 2018-09-04 12:00 ZDM 089/ 2018

Pages

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

Follow the instructions in the bid document to register your interest with the purchasing agency. This important step will help keep you up to... Read More

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