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 For more information on the tender courses please email Werner at

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.
Speed Humps on P333 & P32. 2018-11-20 11:00 ZNT373T/C238/1100/S/19
Construction of Headwalls on L3150. 2018-11-20 11:00 ZNT373T/C238/1100/S/71
Supply and Installation of Mobile, Portable Radios and Batteries for Fire Department at Moorreesburg 2018-10-18 12:00 6/5/2/1
Laboratory Services Needed for Sanas Accredited Testing of Roads Materials 2018-10-18 12:00 6/5/2/386
Supply: Tools and equipment 2018-10-23 12:00 GD11900446
Supply and Install Lime Feeder, Butterfly Valve and Fasteners at Withoogte 2018-10-22 12:00 6/5/2/384
Supply and Delivery of Water Striker Service Pump End at Moorreesburg 2018-10-23 12:00 6/5/2/340
Supply and Installation of a Robotic Camera 2018-11-08 12:00 RFP/RBF/2018/63
Design, Development, Manufacture and Integration of a Military Mobile Headquarters Vehicle. 2018-11-13 15:00 DLS150651
Replacement of old ICT equipment. 2018-11-14 10:00 DBN/CAP (RTPC) 783
Supply and Delivery of Salga Games 2018 Kits “tracksuit, T-Shirts and Shorts” for the Zululand District Municipality 2018-10-30 12:00 ZDM109/2018
Provision of fire detection system maintenance. 2018-11-14 10:00 MPGXC005354
Supply & delivery of ticketing equipment. 2018-11-14 10:00 DBN/CAP (RTPC) 792
Supply, delivery and Off-Loading of 5 Ton Sudfloc 3860 at Krugerdam Water Treatment Plant 2018-10-18 12:00 Q10.10.18
Supply, Delivery and Off-Loading of 12 Ton Sudfloc 3860 at Vaalbank Water Treatment Plant 2018-10-18 12:00 Q11.10.18
The supply and delivery of Gym Equipment. 2018-11-14 10:00 CORP4588
The replacement of Roof at Eskom Park in Witbank. 2018-11-14 10:00 CORP 4587
Supply and deliver Lamps Tubular metal halide ZDL250 MHT 2018-10-24 11:00 SQ10181287
Supply & maintenance of a self-propelled on-track wagon with crane - as & when required (12 months). 2018-11-14 11:00 DBN/CAP (RTPC) 789
Supply & Deliver Flourescent Fittings 1.2mm switch start 240 complete with 2 tubes 2018-10-24 11:00 SQ10181287


Advantages and disadvantages of Consortiums

Consortiums are often considered as entities to use when responding to tenders in South Africa. The question that arises is whether to use a Consortium or a Joint Venture when responding to a tender. To help you with this we have compiled a list of advantages and disadvantages for both Consortiums as well as Joint Ventures. In this article we list the advantages and disadvantages of Consortiums. Look out for the same article on Joint Ventures.

Consortiums Advantages:

  • Easy to establish as there are no formal procedures... Read More
Free Keyword search

Search all tender notices for FREE!

No subscription or registration required!

You can also search by the reference of the the tender.

Advanced search

Search by Issuer, Region or Sector, individually, or using any combination of the three.