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.
Department of Public Works: Pietermaritzburg: 1 Prince Alfred Street: Provision of security services for a period on thirty (36) months 2019-03-13 11:00 ZNT 2854W
Department of Public Works: 181 Mayors Walk Road, Pietermaritzburg: Provision of security services for a period on thirty (36) months 2019-03-13 11:00 ZNT 2855W
Department of Public Works: Port Shepstone: 35-37 Ridge Road: Provision of security services for a period on thirty (36) months 2019-03-13 11:00 ZNT 2858W
Department of Public Works: Main Road, New Hanover : Provision of security services for a period on thirty (36) months 2019-03-13 11:00 ZNT 2856W
Property for hiring: Interest parties are hereby invited to submit offers to hire the following property”voetstoots” for a two (2) year period, which is owned by the National Dept of Public Works : 2019-03-20 11:00 UCACT1- 10/ 2019
Appointment of a service provider to render maintenance of the electronic security systems at the Department of Public Service and Administration for a period of two (2) years. 2019-03-08 11:00 DPSA005/ 2018
Appointment of a service provider to store records off-site for the Department of Public Service and Administration for a period of 12 months. 2019-03-08 11:00 SCM002/ 2018
Rendering of a comprehensive laundry service to institutions in the Garden Route District, Department of Health, Western Cape Government for a three (3) year period 2019-03-15 11:00 WCGHSC0160/ 2018
Painting of Animal Hospital at Military Veterinary Hospital in Potchefstroom. 2019-03-11 11:00 CPSC- B- M- 031- 2018R
Appointment of a service provider to supply and deliver water tanks to juniorcare landcare projects 2019-03-01 11:00 4.4.12.2/ 37/ 18
Appointment of a service providers for Sage HR & payroll upgrade to Sage 300 people (including e-recruitment), SCM ACCETECH (BPM) for CCMA for a period of three (3) years. 2019-03-08 11:00 CCMA/ 2018/ 19- ICT
Request for information (RFI) appointment of a service provider to provide office space on lease agreement for Mthatha Office for a period of five (5) years. 2019-03-08 11:00 CCMA/ 2018/ 28- EL
The appointment of a supplier(s) for the supply and deliver stationery to the National Energy Regulator of South Africa (NERSA) for a period of thirty-six (36) months. 2019-03-07 11:00 NERSA/ 1819/ FAD/ SOS/ BID005
Removal of Existing Boundary Fence, Supply and Erect New Clearview (Or Equal – Must Be Approved), Anti-Climb Security Fence, Pedestrian and Drive Gates at Central Office and Main Campus 2019-03-15 10:00 CENT- FENCE- 2019
Removal of Existing Boundary Fence, Supply and Erect New Clearview (or Equal – Must Be Approved), Anti-Climb Security Fence, Pedestrian and Drive Gates at Lere La Tshepe Campus 2019-03-15 10:00 LERE- FENCE- 2019
Removal of Existing Boundary Fence, Supply and Erect New Clearview (Or Equal – Must Be Approved), anti-Climb Security Fence, Pedestrian and Drive Gates at Bonamelo Campus 2019-03-15 10:00 BON- FENCE- 2019
Structural Repairs, Internal and External Repairs and Renovations, Plumbing and Electrical Repairs and Renovations to the Classroom Block at the Bethlehem Campus Heritage Building. 2019-03-15 10:00 BETH- OLDBLOCK- 2019
Construction of New Male and Female Ablution Facilities Including Water Storage Facilities, Grey Water Treatment Facilities and Electrical Installation at Lere La Tshepe Campus. 2019-03-15 10:00 LERE- ABLUTION- 2019
Structural Repairs and Foundation Repair to External Classroom Walls at Itemoheleng Campus 2019-03-15 10:00 ITEM- WALLS- 2019
Roof Structure and Roof Sheeting Repairs and Replacement, Where Necessary, Including Waterproofing at Lere La Tshepe Campus 2019-03-15 10:00 LERE- ROOF- 2019

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8 things you must know about Joint Ventures

By Werner van Rooyen

31 January 2019

One of the most popular types of business arrangements that are being used by South Africans, in the Tender environment, is Joint Ventures.

There are eight things that you must know about Joint Ventures:

  1. Definition

A Joint Venture is a strategic cooperation where two or... Read More

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