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.
Services of a professional and suitably qualified training service provider to provide accredited training to 50 CIDB level 1-2 building and civil contractors as part of the EPWP contractor development programme in the Western Cape, for a period of 10 months. 2018-07-17 11:00 S049/ 18
Supply 08, Hpv Vaccine Fridges 2018-06-29 11:00 24/ 18- 19
Request for proposals to appoint a suitable, qualified and experienced service provider to assist the Department of Tourism with the facilitation of the Destination Planning Manual, with a view to plan and develop destinations from local level upwards for a period of twelve (12) months. 2018-07-19 11:00 NDT0010/ 18
Appointment of accredited training service providers to manage the implementation of the tourism safety monitors programme in the four (4) provinces (KZN, LP, NC and WC) for a period of twelve (12) months. 2018-07-16 11:00 NDT0009/ 18
Sinle Units Paeds Y-Connector Line Luer Lock. 2018-07-09 11:00 ZNQ 11/ 17- 18
The appointment of a service provider to review the Sedibeng District Municipality Spatial Development Framework within a period of nine (9) months. 2018-07-13 11:00 DRDLR- PSSC: GP- 0001(2018/ 2019)
Supply Suture Mersilk 2/0 100cm Length 3/8 Reverse Cutting Similar Or Equivalent To W793 Sabs/Ce/Iso Approved As Per Specification 2018-07-09 11:00 ZNQ 256/ 18- 19
Supply Suture Vicryl 2/0 70cm Straight Cutting Similar Or Equivalent To V524g Sabs/Ce/Isoapproved as per specification 2018-07-09 11:00 ZNQ 251/ 18- 19
Terms of reference for the appointment of a panel of service providers specialising in internal audit to provide support to the Departmental Directorate Internal Audit for a period of three years. 2018-07-16 11:00 BID VA49/ 604
Appointment of a Service Provider for the KZN Economic Council Secretariat. 2018-07-23 11:00 ZNT 06 EDTEA 18/ 19
Appointment of a Service Provider to Coordinate Municipal Business Licensing Project Management. 2018-07-23 11:00 ZNT 06 EDTEA 17/ 18
Tonsil Swabs 25mm X 100 Mm X 36 Ply, Sterile With Xray Detect Line 2018-07-09 11:00 ZNQ 13/ 18- 19
The Department of Economic Development and Tourism (DEDAT) seeks to procure a service provider accredited by the Department of Higher Education and Training to provide advanced business training for 100 Small Micro Enterprises(SMEs) in the following regions: Cape Metropole,Central Karoo,Cape Winelands and Eden. 2018-07-20 11:00 EDT 001/ 18
The Rainwater Harvesting Specifications in School at Gauteng Province 2018-07-13 11:00 COGTA 4/ 2/ 2- 2018/ 06
Health Care Risk Medical Waste Management 2018-07-13 11:00 GT/ GDH/ 088/ 2018
Procurement of a Service Provider to conduct Capacity Building Interventions (Training and Coaching) in specific Management Approach to 200 Municipal Officials in six (6) targeted municipalities. 2018-07-16 11:00 COGTA 4/ 2/ 2- 2018/ 07
Gauze plain 100mm x 100mm x 8ply non sterile (packet of 100) x 36 000 packets. 2018-07-18 11:00 252/ 06/ 18
Development of a strategic corridor development plan covering-Vryheid-Emadlangeni- Newcastle -Ermelo 2018-07-23 11:00 ZNT 2031A/ 2017 LG
Appointment of professional services provider for the EIA and Engineering Designs for the cemetery site in Frankfort, Mafube Local Municipality, Free State Province. 2018-07-13 11:00 MISA/ MLM / CSF/ 005/ 2018
Supply and Delivery of Disposable Syringes, Needles and Accesories to all Hospitals/Institutions Under the Control of the Department of Health, Western Cape Government for a three year period 2018-07-20 11:00 WCDOH6/ 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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