Issue Date: 
Thursday, October 31, 2019

Principles when pricing your tender

By Werner van Rooyen, Director of HowToTender (Pty) Ltd which specializes in tender consulting and tender training.

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 exceedingly 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 substantial 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. Law can influence pricing 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 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 attend our “Become a Tender Expert” 2-Day workshops presented in Johannesburg, Pretoria, Durban, Port Elizabeth, and Cape Town.  Book and pay online at https://howtotender.co.za/tender-expert-form/

Contact us at wernervr@howtotender.co.za should you require more information.

You can also purchase a Tender Manual (Handbook) on our website https://howtotender.co.za/ which is a step by step guide how to respond to a South African Tender.  It includes examples of completed SBD forms.

Title Closing Date Tender No.
Department of Co-Operative Governance and Traditional Affairs: Umzinyathi District: Nquthu: Community Service Centre Infrastructure Rehabilitation Programme: Alterations and Refurbishment for Molefe Tac 2020-10-20 11:00 ZNTL 04222 W
Provision of Maintenance and Support for Cisco Prime Infrastructure for a period of two (2) years. 2020-10-09 11:00 RFB 2250- 2020
Construction of Mandlazi Primary School Early Childhood Development Centre In Harry Gwala District, KZN. 2020-10-12 12:00 CDC/ 462/ 20- T
Supply and install a Unified Communication solution including Project Management Services during the installation, end devices, formal training, and 3rd Level Support and Maintenance (Software and hardware assurance) for 5 years for the Department of Telecommunications and Postal Services (DTPS). 2020-10-09 11:00 RFB 2266/ 2020
Construction of Savela Primary School Early Childhood Development Centre In Harry Gwala District, Umzimkhu, KZN 2020-10-12 12:00 CDC/ 463/ 20- T
Department of Public works: Pretoria: Procurement of 2 -3 bedroomed fully furnished house with the minimum of 2 bathrooms for Cuban Technical Advisors for a period of 18 months in Pretoria East, Faerie Glen, Menlo Park, Waterkloof and Hatfield. 2020-10-12 11:00 H20/ 006PF
Construction of Straalhoek Primary School Early Childhood Development Centre In Harry Gwala District, UMZIMKHU, KZN. 2020-10-12 12:00 CDC/ 464/ 20- T
SAPS-Criminal Records and Crime Scene Management - Procurement of alternative office accommodation of 1 123.25 square meter and 20 parking bays for a period of 5 years in Pretoria North (CBD). 2020-10-12 11:00 H20/ 004PF
DCS: Sevontein Prison: 36 Months Term Contract: Preventative and Maintenance of Water Treatment Plant It is estimated that tenderers should have CIDB contractor grading designation of 3ME or 3CE or Higher. 2020-10-27 11:00 DBN20/ 09/ 01
Construction Of Early Chilhood Development Classrooms (ECDC) At Luzindela Primary School In King Cetshwayo District, KZN 2020-10-12 12:00 CDC/ 465/ 20- T
DCS: Mthunzini Prison: 36 Months Term Contract: Preventative and Maintenance of Sewage Treatment Plant It is estimated that tenderers should have CIDB contractor grading designation of 3ME or 3CE or Higher. 2020-10-29 11:00 DBN20/ 09/ 03
DCS: Sevontein Prison: 36 Months Term Contract: Preventative and Maintenance of Sewage Treatment Plant It is estimated that tenderers should have CIDB contractor grading designation of 3ME or 3CE or Higher. 2020-10-28 11:00 DBN20/ 09/ 02
DCS: Qalakabusha Prison: 36 Months Term Contract: Preventative and Maintenance of Sewage Treatment Plant. It is estimated that tenderers should have CIDB contractor grading designation of 3ME or 3CE or Higher. 2020-11-05 11:00 DBN20/ 09/ 06
The South African Civil Aviation Authority (SACAA), in its quest to strengthen its brand presence on social media platforms wishes to contract a solid and effective social media and marketing company to develop a social media management strategy and implementation thereof. 2020-10-09 11:00 Q66433345
DCS: Waterval Prison: 36 Months Term Contract: Preventative and Maintenance of Piggery Sewage Treatment Plant and Bulk Water Supply Pump Station. 2020-11-10 11:00 DBN20/ 09/ 07
DCS: Ncome Prison: 36 Months Term Contract: Preventative and Maintenance of Water Treatment Plant It is estimated that tenderers should have CIDB contractor grading designation of 3ME or 3CE or Higher. 2020-11-03 11:00 DBN20/ 09/ 04
Appointment of a Training Provider For Life Orientation Teachers Workshops Over Three Years 2020-10-05 11:00 BS/ 2019/ RFB428
Appointment of a Service Provider Who Is MICT Seta Accredited to Deliver and Implement an NQF Level 4 Film and Television Production Operations Qualification as a Learnership Programme for 30 KwaZulu-Natal Youth Per Annum for a Period of Three Years Which Will Capacitate Them With The Relevant Film and TV Skills 2020-09-28 11:00 KZNFC- T06A/ 2020/ 21
Establishment of a Government Technical Advisory Centre (GTAC) Panel of Professional Service Providers for a Period of Three (3) Years – Batch 4 2020-10-02 11:00 GTAC 015- 2020- 21
For The Identification of Accredited Training Providers to Facilitate The Design and Delivery of a Training Programme on The Mfma Regulated Minimum Competency Levels For Approximately 100 National and Provincial Treasury Officials on Identified Unit Standards 2020-09-25 11:00 GTAC 014- 2020- 21

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