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.
The appointment a service provider for the provision and implementation of a Forecaster Workstation Solution, to allow for optimal visualization of different meteorological data sets needed to deliver weather forecasting services. (Re-advertisement) 2020-03-13 11:00 SAWS- 235/ 19
Manufacturing, Supply and Deliver of Cap Peak, Hat W/P, Peak Cap Braided Brig/Gen, Peak Cap Braided Lt Col/Col, Border Hat Gold Braided Brig/Gen W/P, Border Hat Gold Braided Lt Col/Col And Bar Coded Labels for a Period of Two (2) Years: Division: Supply Chain Managememt 2020-03-17 11:00 19/ 1/ 9/ 1/ 59TC (19)
Manufacturing Supply and Delivery of Shirts Field Dress Grey, Chambray, Camouflage Stf and Pps, Shirts Saps Guards and Shirts Long Sleeve to the South African Police Service for a period Of Two (2) Years: Division: Supply Chain Management 2020-03-16 11:00 Gauteng: Department of Police: SAPS: SUPPLY CHAIN MANAGEMENT: PROCUREMENT MANAGEMENT
Individual consultant junior archivist 2020-03-18 11:00 EOI 7B/2019
Supply of Caps, utility, baseball and Caps, garrison for the S.A. Navy. 2020-03-31 11:00 SPSC- B- 032- 2019
Supply of Jacket, Cold Weather for the S.A. Navy. 2020-03-26 11:00 SPSC- B- 028- 2019
Supply and delivery bullet resistant vest spare parts to the South African Police Service for a period of three (03) years 2020-03-20 11:00 19/ 1/ 9/ 1/ 25TT(19)
Supply of Belts for the S.A. Navy, blue/black. 2020-03-26 11:00 SPSC- B- 027- 2019
Supply of Tracksuits for the S.A. Navy Blue and White 2020-04-01 11:00 SPSC- B- 033- 2019
DISPOSAL OF TRUCKS TRUCK ONE Make: Mercedez Benz,Vehicle Category: Heavy Load Vehicle ,Gross Vehicle mass: 3500 kg ,Tare :6850/2017-11-30, Driven: Self propelled ,Vehicle description: Van Body. TRUCK TWO Make: Mercedez Benz ,Vehicle Category: Heavy Load Vehicle ,Gross Vehicle mass: 3500 kg equip to draw Tare :6450/2012-10-31 ,Driven: Self propelled ,Vehicle description: Truck 2020-03-06 11:00 SAST/ 2020/ DISPOSALOFTRUCKS
Supply and delivery of 9 x 19 mm, calibre, ball, (full metal jacket) ammunition to the South African Police Service for a period of two (02) years 2020-03-20 11:00 19/ 1/ 9/ 1/ 76TT(19)
Appointment of a Panel of Legal Firms To Provide Legal Services and Legal Support To Umalusi for a period of (3) years 2020-03-12 12:00 Umalusi Tender(19- 20) T005
Supply and delivery of backpack with hydration bladder to the South African Police for a period of two (2) years 2020-03-20 11:00 19/ 1/ 9/ 1/ 50TA(19)
Appointment of a service provider to provide Executive Search Services for the position of a Chief Executive Officer (CEO) for the South African Weather Service (Re-advertisement) 2020-03-13 11:00 SAWS- 236/ 19
The South African Social Security Agency hereby invites proposals from potential service providers for the provision of WAN services at SASSA. 2020-03-19 11:00 SASSA: 41/ 19/ ICT/ HO
Purchasing and issuing of gym equipment to the South African Police for a period of two (2) years 2020-03-30 11:00 19/ 1/ 9/ 1/ 40TA(19)
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the Routine Road Maintenance of National Route R524 from Louis Trichardt to Punda Maria Gate, R578 from Louis Trichardt to Greater Giyani Municipal Border, R36 from Molemole municipal border to Bandelierskop, N1 from Molemole municipal border to Louis Trichardt. 2020-03-20 11:00 X.002- 103- 2019/ 1 (NON- TOLL) & N.001
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the Routine Road Maintenance of National Route N11 from Mokopane to Blouberg Municipal border, R518 from Mokopane to Lepelle-Nkumpi Municipal border, R101 from Mokopane to Polokwane Municipal border. 2020-03-20 11:00 SANRAL X.002- 090- 2019/ 1
The South African National Roads Agency SOC Limited (SANRAL) invites tenders for the Routine Road Maintenance of National Route R521 from Molemole municipal border through Vivo to Makhado municipal border, R523 from Blouberg municipal border to Masekwaspoort, N1 from Louis Trichardt to Beit Bridge Border Post. 2020-03-20 11:00 SANRAL X.002- 102- 2019/ 1 (NONTOLL
The Appointment of a Services Provider to Install and Upgrade The Networking Infrastructure at the Harold Porter National Botanical Garden in Bettys Bay and The Karoo Dessert National Botanical Garden in Worcester 2020-03-13 11:00 SANBI: IT364/ 2020

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