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.
Ceza Stand Alone Water Supply Phase 2: Reticulation 08 2018-09-04 12:00 ZDM 088/ 2018
Supply and Installation of Concrete Universal Sleepers at various Turnouts within Western Cape Region. 2018-09-11 12:00 02/2018/CTN/INFRA
Ceza Stand Alone Water Supply Phase 2: Reticulation 07 2018-09-04 12:00 ZDM 087/ 2018
Installation of concrete mast poles and optic fibre cable. 2018-09-11 10:00 RFQ CRAC-KGG-27518.
Ceza Stand Alone Water Supply Phase 2: Reticulation 06 2018-09-03 12:00 ZDM 086/ 2018
Ceza Stand Alone Water Supply Phase 2: Reticulation 05 2018-09-03 12:00 ZDM 085/ 2018
A5 -Informal Trading- Permit Paper. 2018-08-29 12:00 SD11900134
Supply and delivery of iphone. 2018-08-24 11:00 GK11900074
Ceza Stand Alone Water Supply Phase 2: Reticulation 04 2018-09-03 12:00 ZDM 084/ 2018
For the provision of stripping, fault finding, repair, installation, testing and commissioning of coiling machine situated at RSE Business Bay 64 Durban. 2018-09-11 10:00 TE18-DBN-06I-06087
Supply and Delivery of Cape Times or Cape Argus (Morning Edition) and Die Burger Newspapers for the Business Express Train Services. 2018-09-11 12:00 12/2018/CTN/CS
Rural Roads Assets Management system 2018-09-19 12:00 ZDM095/2018
Water Loss and Demand Management System 2018-09-19 12:00 ZDM096/2018
Rehabilitation of Service Roads within the Western Cape Region. 2018-09-11 12:00 01/2018/CTN/INFRA
Register on the Database for Panel of Attorneys 2018-09-10 12:00 ZDM 098/2018
Supply and delivery of security clothing. 2018-09-18 11:00 CD19 B/2018
Hiring of an excavator for 30 days for Regravelling of Gravel Roads in Region 1 (Bethal and Emzinoni) 2018-08-27 12:00 RFQ NO: 8/3/2- 59/2018
Sethembe Emerging Contractors Programme 2018-08-30 12:00 ZDM103/2018
Head of actuarial function services. 2018-09-19 12:00 2018/11
Supply and delivery of Total Station and Accident/Crime Scene Mapping Software as per specification 2018-08-23 15:00 KEQ.EMPD.10.87 RE-ADVERT

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

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.