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.
Supply: plinth - type: mini- sub jumbo 2 2017-11-27 14:00 GE11800785
Supply: Epidermic 311 5litre a solvent free underwater grade epoxy compound 2017-11-30 14:00 GE11800786
Supply Engineering Materials 2017-11-27 14:00 GE11800788
Guarding and Security Services at the Overberg District Municipality’s Bredasdorp and Caledon Offices 2017-12-18 12:00 T16-2017/18
Supply, delivery, installation & training for a discrete analyser to JB Marks Local Municipality in Potchefstroom 2017-12-01 12:00 TENDER: 99/2017
Supply: Civil materials 2017-11-30 14:00 GE11800789
Supply: 2 each x zenith 088kw, 220v, submissible pump 2017-11-30 14:00 GE11800790
TVBR Mpu Dual Trailer Mounted Generators 2017-11-27 12:00 RFI/RBF/2017/12
Gardening Service: Simons Town Municipal Court 2017-11-30 12:00 SD11800272
Water treatment for electrode boilers, Chiller plant and cooling towers. 2017-11-30 11:00 RFQ/17/241
Quotation for the construction of Nohhahha rising main in ward 15 of Umfolozi Local Municipality 2017-11-30 11:00 KCDM/QUOTE/210/2017
Printing and delivering of Postbank Terms & Conditions 2017-12-01 11:00 C18/Central Region/2017
Supply and deliver Fuse Wire Tinned Copper 2.0mm 2017-11-30 11:00 SQ11171141
The supply, installation and commissioning of a Class A+A+A+ Sun Simulator with Integrated Temperature Chamber for PV Modules for CSI 2017-12-05 16:30 CSIR RFP No. 3163/05/12/2017
Supply and deliver Penetrating Spray 2017-11-30 11:00 SQ11171141
Bloemfontein Campus: 83707-302: UFS University Estates Annex (CIDB 6GB) 2017-12-08 11:00 1-452-10411-0198
Supply and deliver Go-Mark Liquid Gel White 2017-11-30 11:00 SQ11171141
Appointment of a contractor for the upgrading of roads, related Stormwater and relocation of bulk sewer in Skoonvlei - Phase 2, Western Cape. 2017-12-08 11:00 SSC WC 04 (2017/2018) DRDLR
The upgrading of internal surfaces with the associated storm water and fencing, for Ceres valley fruit situated in the Witzenberg Municipality, Western Cape province. 2017-12-08 11:00 SSC WC 08 (2017/2018) DRDLR
The appointment of a contractor for the construction of Hlabisa irrigation scheme in Mtubatuba Local Municipality within Umkhanyakude District in the province of Kwazulu-Natal 2017-12-11 11:00 SS-KZN 7/1/6/3 (634) 000R

Pages

Functionality and Tenders

In all competitive bids (tenders) you as the bidder will have to respond to Functionality. You will need to score a set minimum number of points, measured as a percentage, on Functionality of a competitive bid (tender) in order to advance to the next phase of evaluation in the tender process.

Usually Organs of State evaluate competitive bids (tenders) as follows:

  • The tender response is evaluated on Functionality where the bidder must score points out of a maximum of 100 points.
  • A threshold of between 65 to 75 out of 100 points... 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.