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.
Render services as a travel agent to the college 2018-09-28 11:00 T/ 03/ 18 TA
Training of 50 beneficiaries in Garment making Skills Programme: nonaccredited 2018-09-28 11:00 T/ 29/ 18 Skill Garment
Training of 50 beneficiaries in Welding Skills Programme: non-accredited 2018-09-28 11:00 T/ 30/ 18 Skill Weld
Training of 50 beneficiaries in Further Education + Training certificate, Automotive Repair and Maintenance NQF LEVEL 4; SAQA ID 78525 2018-09-28 11:00 T/ 20/ 18 Learn AMR
Training of 50 beneficiaries in Vehicle Maintenance & Repair Assistant Skills Programme NQF L2 2018-09-28 11:00 T/ 27/ 18 Skill VMRA
Training of 50 beneficiaries in Further Education + Training certificate: Information Technology Technical Support NQF L4; SAQA ID 78964 2018-09-28 11:00 T/ 19/ 18 Learn TS
The appointment of a consultant to undertake specialist studies to inform the developable area for the proposed subdivision on ER84603, Retreat, Cape Town. 2018-09-20 11:00 SSC WC Q12 (2018 / 2019) DRDLR
Training of 50 beneficiaries in National Certificate, Information Technology, End User Computing, NQF Level 3; SAQA ID 49077 2018-09-28 11:00 T/ 21/ 18 Learn EUC
Training of 50 beneficiaries in Further Education + Training certificate: Information Technology Systems Development NQF L4; SAQA ID 78965 2018-09-28 11:00 T/ 18/ 18 Learn SD
Training of 50 beneficiaries in National Certificate, Animal Production, NQF Level 4, SAQA ID 48979 2018-09-28 11:00 T/ 24/ 18 Learn Animal
Internal Audit services 2018-09-28 11:00 T/ 14/ 18 IA
Appointment of the Service Provider to Undertake an Assessment of the Socio-Economic Impacts of the Implementation of the Waste Classification and Management Regulations and the Associated Waste Norms and Standards. 2018-09-21 11:00 Q- 119- 18- 19
Appointment of Auditors to Do Value for Money (VFM) and Performance Audits for Selected Projects within the Department’s Expanded Public Works Programmes 2018-09-21 11:00 Q- 113- 18- 19
Appointment of a Service Provider to Undertake the Hazard Identification and Risk Assessments (HIRA) and the Review of Existing as well as Development of Appropriate Risk - Responsive Control Measures at the Branch: Oceans & Coasts 2018-09-21 11:00 E 1468
Appointment of service for the manufacturing and delivery of 1000LT complete fire truck units for firefighting in the Eastern Cape Province for the Department of Agriculture Forestry and fisheries at regional office King Williams Town. 2018-09-21 11:00 4.4.12.4/ 17/ 18
Cleaning services for inner city hostels in Johannesburg for a period not exceeding 36 months (Denver, George Goch, Jeppe, LTA, MBA and Murray and Roberts). 2018-09-21 11:00 HLA 4/ 2/ 4- 2018/ 04
Appointment of a security contractor to render security services at Modimolle, Polokwane and Makhado for the Department of Agriculture, Forestry and Fisheries for a period of three (3) years. 2018-09-21 11:00 4.4.12.4/ 10/ 18
Provision and service of chemical toilets. 2018-09-25 11:00 HLA 4/ 2/ 4- 2018/ 05
The appointment of a security company to render security services in the Mpumalanga province at mbombela to the department of agriculture, forestry and fisheries for a period of three (3) years. 2018-09-21 11:00 4.4.12.4/ 11/ 18
The Western Cape Department of Agriculture (WCDoA) requires the service of a radio presenter. 2018-09-24 11:00 BID 848 - 2018/ 2019

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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
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