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.
Re-Advert - Provision of CETA branded personal protective equipment (PPE) to learners on CETA - funded projects 2018-03-02 11:00 015- 2017/ 2018
Appointment of a service provider to provide maintenance services for telephone management and switchboard systems at the Bloemfontein Deeds Registry for a period of 24 months 2018-03-19 11:00 DRDLR (CRD- 11) 2017/ 18
Appointment of a service provider to render garden maintenance services for a period of twenty four (24) months: Bloemfontein Deeds Registry 2018-03-19 11:00 DRDLR (CRD- 10) 2017/ 18
Request for Secure Care Services 2018-03-16 11:00 GT/ GDSD/ 053/ 2018
Erp Implementation Resouces on an ‘as and when Required’basis for a period of 36 months. 2018-03-19 11:00 H17/ 050
The appointment of a service provider for 3 regions to assist the Department of Rural Development and Land Reform with design, layout and printing on a 24 month term contract. 2018-03-15 11:00 5/ 2/ 2/ 1- RDLR 0146(2017/ 2018)
A Bid in order to appoint a service provider to conduct a research on the reduction of silicosis in the non-mining sector for the Department of Labour. 2018-03-23 11:00 LAB 01/ 2018
Rendering of a Cleaning Service to Vredenburg Hospital, Department of Health, Western Cape Government for a three (3) year period 2018-03-26 11:00 WCGHSC0132/ 2018
Procurement of accommodation to support the April 2018 Grade 12 camps 2018-03-05 12:00 CS/SCM/COO/SSIP/R17-18/67
Appointment of a service provider for VAT administration for the National Department of Health for Global Funds grant. 2018-03-09 11:00 NDOH 27/ 2017- 2018
Testing of Oysters for the presence of microorganisms & heavy metals 2018-03-02 11:00 RFQ 000223
Supply and construction of net cage 2018-03-02 11:00 RFQ 000226
Appointment of a service provider to perform fisheries stock assessment 2018-03-16 11:00 4.4.12.4/ MLRF 154/ 18
Appointment of an accredited service provider to train officials of the Department of Agriculture, Forestry and Fisheries on skills development programmes during 2018/19, 2019/20 and 2020/21 financial years 2018-03-16 11:00 4.4.12.4/ 17/ 17
Gardening Tools 2018-03-02 11:00 RFQ 000224
Provide internet, email and disaster recovery services for 2018-2021 2018-03-16 14:00 CBRTA/ HO/ 0041
Supply: Electrical components 2018-02-26 11:00 GH11800441
Supply: Electrical accesories 2018-02-27 15:00 GJ11800696
Supply, delivery and installation of security fencing at the main office building in Clanwilliam 2018-03-05 12:00 Q26/2017/2018
Supply: Electrical accessories 2018-02-27 15:00 GJ11800697

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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