Issue Date: 
Thursday, January 31, 2019

2 items that determine tender pricing

Article by Werner van Rooyen

www.howtotender.co.za

31 January 2019

Many bidders that respond to tenders struggle when it comes to calculating a price for a specific tender. One of the reasons for this is that a large number of Small Business Owners are usually new to the tender process and therefore they lack the necessary experience to price their bids correctly.

Without getting into the fundamentals of accounting there are two basic items that determine your tender price. In fact, these two basic items should always be your guide when determining your price on the goods or services you sell.

The two items that determine pricing is:

  • Direct Costs; and
  • Indirect Costs.
  1. Direct Costs

Direct Cost is the cost that one pays to either:

  • Produce goods or services; or
  • The cost price you pay to procure goods or products that you will resell to your customers.

In other words, if you manufacture wooden chairs your Direct Cost will be the money you spend on purchasing the wood for the chairs. Other Direct Cost in manufacturing wooden chairs would be wood glue, nails and labour costs.

Thus, when responding to a tender you must take the utmost care that you include all your Direct Costs in your tender price.

  1. Indirect Costs

Indirect Cost is the expense that you have to incur to run your business and these costs do not necessarily generate any income. Some of the most common Indirect Cost that your business incurs will be:

  • Rent
  • Utility expenses such as electricity and water
  • Telephone
  • Stationary
  • Salaries and wages
  • Accounting fees

It is very important to include Indirect Cost in your tender price. Remember that the tender will form part of your normal day-to-day business and therefore it must contribute to your Indirect Cost.

The question is how to calculate how much of the Indirect Cost is contributable to the tender. There isn’t one specific rule but one of the more common rules is to estimate the time spend on servicing the tender and then use that to factor in the Indirect Cost into the tender price. In other words if you have to spend 50% of your time servicing the tender then 50% of your Indirect Cost should be part of your tender price.

To learn more about this and many other tender conditions attend our “Become a Tender Expert” 2-Day workshops presented in Johannesburg, Pretoria, Durban, Port Elizabeth and Cape Town. Book and pay online at www.howtotender.co.za. Please contact Estelle at Estelle@howtotender.co.za should you require more information.

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.
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of consulting engineering services for the new ring road on National Route N2 Section 17 around Butterworth 2019-11-08 14:00 SANRAL N.002- 170- 2020/ 1F
Invitation for bids to evaluate the implementation of the finance linked individual subsidy programme ( FLISP ) 2019-11-15 11:00 HS 01/ 2019/ 2020
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Reseal Of N2 Section 16 From Mooiplaas (Km 49.9) To Komga T-Junction (Km 70.2). 2019-11-01 14:00 SANRAL N.002- 160- 2018/ 1F
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Upgrade on National Route R75 Section 2 from Uitenhage (km 5.0) to Kirkwood (km 31.0) 2019-11-01 14:00 SANRAL R.075- 020- 2017/ 1F
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of Consulting Engineering Services for the Upgrade On National Route R410 Section 1 (Km 0,0 to Km 37,74) to Section 2 (Km 0,0 to Km 3,0) From The R392/R410 T-Junction To Lady Frere. 2019-11-01 14:00 SANRAL R.410- 012- 2018/ 9F
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the provision of consulting engineering services for the new ring road on National Route N2 Section 17 and 18 around Dutywa 2019-11-08 14:00 SANRAL N.002- 178- 2020/ 1F
Provision of specialised psychiatric security services at Fort England Hospital, Grahamstown in the Eastern Cape for period of thirty six months (36) 2019-11-15 11:00 SCMU3- 19/ 20- 0267- FEH
iSimangaliso Wetland Park Authority, a schedule 3A public entity invites suitably qualified service providers to bid for the construction and rehabilitation of roads situated in the Bhanganek section of the iSimangaliso Wetland Park, Kwa-Zulu Natal 2019-11-11 16:00 RFP NUMBER: 13/ 2019
iSimangaliso Wetland Park Authority, a schedule 3A public entity invites suitably qualified construction service providers to bid for the construction and refurbishment services of iSimangaliso Dredger Harbour Offices, in the St Lucia section of the Park 2019-11-11 16:00 RFP NUMBER: 10/ 2019
iSimangaliso Wetland Park Authority, a schedule 3A public entity invites suitably qualified service providers to bid for the construction and rehabilitation of roads and Parking area in the Sodwana Bay section of the iSimangaliso Wetland Park, Kwa-Zulu Natal. 2019-11-11 16:00 RFP NUMBER: 17/ 2019
iSimangaliso Wetland Park Authority, a schedule 3A public entity invites suitably qualified service providers to bid for the construction and rehabilitation of roads situated in the Mabibi section of the iSimangaliso Wetland Park, Kwa-Zulu Natal 2019-11-11 16:00 RFP NUMBER: 11/ 2019
Supply and deliver physical science kits for 60 MST schools to address the grades 10-12 curriculum & assessment policy statement 2019-11-08 11:00 BWCED 2543/ 19
iSimangaliso Wetland Park Authority, a schedule 3A public entity invites suitably qualified service providers to bid for the construction and rehabilitation of roads situated in the Kosi Bay section of the iSimangaliso Wetland Park, Kwa-Zulu Natal. 2019-11-11 16:00 RFP NUMBER: 12/ 2019
iSimangaliso Wetland Park Authority, a schedule 3A public entity invites suitably qualified service providers to bid for construction and rehabilitation of roads situated in the Maphelane section of the iSimangaliso Wetland Park, Kwa-Zulu Natal. 2019-11-11 16:00 RFP NUMBER: 15/ 2019
The Province of KwaZulu-Natal, Department of Transport, invites tenders from Established Contractors, experienced in bridge construction, for The Completion of Nkunzi Bridge No. 175 on D2404 in the Ladysmith Area. 2019-11-07 11:00 ZNT 0008/ 19T
Renovation at East London National Health Laboratory Service (NHLS) Labs 2019-10-28 11:00 RFB087/ 19/ 20
Supply, pack and deliver 32 natural science and technology (NST) kits (1 kit of 127 items) and 25 NST kits (1 kit of 6 items) addressing grades 4 to 7 across the eight (8) WCED districts. 2019-11-08 11:00 B/ WCED 2537/ 19
iSimangaliso Wetland Park Authority, a Schedule 3A Public Entity invites suitably qualified construction service providers to bid for the Structural Refurbishment and Development of a resort at Charters Creeks, in the iSimangaliso Wetland Park, Kwa-Zulu Natal. 2019-11-11 16:00 RFP NUMBER: 18/ 2019
iSimangaliso Wetland Park Authority, a Schedule 3A Public Entity invites suitably qualified construction service providers to bid for the construction and refurbishment services of iSimangaliso Dredger Harbour Offices, in the St Lucia section of the Park. 2019-11-11 16:00 RFP NUMBER: 10/ 2019
FS194 - Maluti a Phofung Local Office Accommodation 2019-11-01 11:00 IEC/ FS- 02/ 2019

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Ease of opening a business

By Werner van Rooyen

www.howtotender.co.za

31 January 2019

South Africa is currently rated 88nd when it comes to the ease of doing business according to survey that is done yearly by The World Bank. This is all good and well if you are an overseas investor with a lot of money and looking for new places to invest in. However, if you are a South African with little or no money, doing and / or starting a business in South Africa can be a daunting task!

To begin with, the statistics are... Read More

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