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.
Job Creation - Horticultural Maintenance for Ward 79 - Mitchell’s Plain 2018-03-02 14:00 SN11800560
Supply and deliver Fine Filling Sand 2018-02-27 11:00 GQ02181689
Job creation - Horticultural Maintenance for Ward 81 -Mitchell’s Plain 2018-03-02 14:00 SN11800561
Supply and deliver BUSH SOIL 2018-02-27 11:00 GQ02181689
Supply and deliver Fine Grit,White 2018-02-27 11:00 GQ02181689
Job Creation- Horticultural maintenance for Ward 82 - Mitchell’s Plain 2018-03-02 14:00 SN11800562
Supply & Delivery of Nuclear Density Gauge /Moisture Gauge, Including Training on Device 2018-02-28 11:00 GQ02181692
Horticultural maintenance of Westridge Community Parks -Mitchell’s Plain 2018-04-27 14:00 SN11800563
Supply: Clothing 2018-02-27 10:00 GA11800439
Supply: Safety shoes 2018-03-01 10:00 GA1180253A
Supply: custom motorcycle boot 2018-02-27 10:00 GA1180412A
Supply: 1x 2Seater couch division multi blue seat and back and 1x single seater arm couch-divison multi blue seat and back vertical lines 2018-02-26 12:00 GL11800570
Supply Professional/Industrial Wet & Dry Vacuum Cleaners 2018-02-22 12:00 GL11800572
Supply 1600mm diameter boardroom table mahogany 2018-02-26 12:00 GL11800573
Repairs Borehole at Ozweleni Usuthu RWSS 2018-02-21 12:00 ZDMQ: 0053/02/2018
Pump Testing at Okhukho under Nkonjeni RWSS 2018-02-21 12:00 ZDMQ 0054-02-2018
Pump Testing at Ntilingwe under Nkonjeni RWSS 2018-02-21 12:00 ZDMQ0055/02/2018
Pump Testing at P700 under Nkonjeni RWSS 2018-02-21 12:00 ZDMQ0056/02/2018
Training on the basics of water distribution systems targeted at the first level response staff of the reticulation branch in The Water & Sanitation Department. 2018-02-23 12:00 SK11800238
Repairs Handpump at Ntabankulu under Nkonjeni RWSS 2018-02-21 12:00 ZDMQ 0057-02-2018

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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